ORDER
P.G. Chacko, Member (T)
1. The appeal arising for regular hearing today is one filed by the Revenue. The learned JDR, Shri Y.R. Kilania is present for the appellant. None present for the respondents inspite of notice. However, their cross objection is on record. Hence, I am inclined to dispose of the appeal on its merits after hearing the learned JDR and considering the records of the case.
2. The facts of the case are briefly as follows :-
The respondents are engaged in the manufacture of goods falling under Chapter sub-headings Nos. 7315.00 and 8431.00 of the Schedule to the Central Excise Tariff Act, 1985. They were availing the Modvat facility under Rule 57A of the Central Excise Rules, 1944. During the relevant period, the respondents had been receiving unmachined parts of chains etc. classified by the manufacturers under Chapter sub-heading 7325.90 and using the same as inputs for the manufacture of their final products. They had also declared the goods as such in their declaration dated 4-3-1993 filed under Rule 57G of the Rules ibid. At the relevant point of time, the respondents began to receive machine parts of chain etc. classified by the manufacturers under Chapter sub-heading 73.15 of the Schedule to the Central Excise Tariff Act and they used such goods for the manufacture of the final products, without noticing the fact that the said inputs were different from those already declared. The respondents, bona fide believing that the inputs are the same as the one already declared, took Modvat credit of the duty paid on the inputs, on 14-11-1995 and 20-12-1995, under Rule 57A of the Rules ibid. Later it came to their notice that the Chapter sub-heading mentioned in the manufacturer’s invoices was different from the declared Heading. Immediately, the respondents filed supplementary declaration on 26-3-1996 for the purpose of availing credit of the duty paid on the inputs supplied under the manufacturer’s invoices dated 14-11-1995 and 19-12-1995. They also filed an application for condonation of the delay involved in the filing of such supplementary declaration. The jurisdictional Assistant Commissioner of Central Excise, however, issued a show cause notice to the respondents asking them to show cause why the Modvat credit amounting to Rs. 23,660/- taken on the inputs covered by the aforesaid invoices should not be recovered under Rule 57(1) of the Rules read with Section 11A of the Central Excise Act, 1944. The Assistant Commissioner further proposed to impose penalty on the assessee under Rule 173Q of the rules ibid. The show cause notice was adjudicated upon by the Assistant Commissioner disallowing the Modvat credit amounting to Rs. 23,660/- and imposing penalty of Rs. 2,500/-on the assessee. The assessee went in appeal against this order of the adjudicating authority before the Commissioner of Central Excise (Appeals), who, by the order impugned in the present appeal before me set aside the Assistant Commissioner’s order and allowed the above Modvat credit, following his own earlier Order-in-Appeal No. 668/C.Ex/CHD/98.
3. I have heard the learned JDR. He reiterates the sole ground raised in the appeal which is to the effect that the Commissioner (Appeals) is not competent to condone the delay in filing the Modvat declaration and that he can at best issue directions to Assistant Commissioner justifying condonation giving his views in Order-in-Appeal for de novo proceedings. This being the only ground of the present appeal, which has been culled out from the order in review dated 29-1-1999 of the Commissioner of Central Excise whereby the present appeal was directed to be filed, I do not think it necessary to persue the aforesaid Order-in-Appeal No. 668/C.Ex./CHD/98 referred to in the impugned order for the purpose of disposing of the present appeal.
4. There is no dispute regarding the receipt of the inputs viz. machine parts of chain etc. covered by the manufacturer’s invoices dated 14-11-1995 and 19-12-1995 by the appellant herein or regarding utilisation of such inputs for the manufacture of dutiable final products or regarding the duty paid nature of such inputs. It is also not disputed that the respondents filed supplementary declaration under Rule 57G(5) of the Central Excise Rules within a period of six months from the date of receipt of the inputs by the respondents, and had also filed an application for condonation of the delay in the filing of such declaration. The Assistant Commissioner rejected the application for condonation of delay observing that no sufficient and cogent reasons had been given by the party for such condonation. Consequently the Assistant Commissioner found that Mod vat credit amounting to Rs. 23,660/- availed by the assessee on the inputs falling under sub-heading No. 7315.00 without declaring the same in the Modvat declaration at the time of taking credit was not admissible to them as per the proviso to Rules 57A and 57G of the Central Excise Rules and hence such duty was recoverable from the assessee under Rule 57-I of the Rules ibid. The lower appellate authority on the other hand found to the effect that the respondents herein had a good case before the Assistant Commissioner for the condonation of delay in the filing of the declaration under the provisions of Rule 57G(5) of the Central Excise Rules. The lower appellate authority, therefore, allowed the application for condonation and held that Modvat credit on the inputs covered by the aforesaid invoices was allowable.
5. The contention of the Revenue that the Commissioner (Appeals) had no power to condone the delay in the filing of the supplementary declaration under Rule 57G(5) of the Rules ibid cannot be accepted in view of the provisions of Section 35A(3) of the Central Excises and Salt Act, 1944, wherein the Commissioner of Central Excise (Appeals) had powers vested in him to confirm, modify or annul the decision or order appealed against. The appeal before the Commissioner (Appeals) was against the order of the Assistant Commissioner rejecting the application for condonation under Rule 57G(5) of the Rules ibid. Therefore, the Commissioner (Appeals) was certainly competent to annul the Assistant Commissioner’s order and to deal with the condonation application of the assessee on its merits. This is precisely what the lower appellate authority has done in the instant case. On this aspect of the matter, the respondents, in their cross objections filed in the present appeal, have cited the decision of the Tribunal in the case of CCE v. T.I. Cycles of India 1993 (66) E.L.T. 498 (T). I find, on a perusal of this decision, that the ratio of this decision is squarely applicable to the present case in support of the respondents’ contention that the lower appellate authority’s order condoning the delay in filing of the Modvat declaration on merits under Rule 57G(5) of the Rules ibid is legally sustainable.
6. Having found the question whether the Commissioner (Appeals) was justified in condoning the delay involved in the filing of Modvat declaration, in the affirmative, I must sustain the impugned order in toto, there being no surviving grounds for the present appeal. In the result, the impugned order is confirmed and the Revenue’s appeal is rejected.
7. Consequently, the Cross Objection No. E/Cross/156/99-NB(SM) filed by the respondents stands disposed of against the Revenue.