S.L. Peeran, Member (J)
1. This appeal has been filed against the OIA No. 333/99 (M-III), dated 31-12-1999 by which the Commissioner (Appeals) has confirmed disallowance of Modvat credit on the ground that appellants availed Modvat credit without filing proper declarations. He has also taken a view that the plea of appellants that they had sent the declarations by Certificate of Posting on 9-6-1994 declaring the particulars of inputs and also final product is not acceptable as they had not taken the dated acknowledgement from the concerned Asstt. Commissioner in terms of the rules, and therefore the plea of appellants that they had sent the declarations by certificate of posting is not acceptable. The only question in this appeal is as to whether the appellants plea with regard to their having sent the declarations by certificate of posting can be accepted and as to whether the previous declarations filed by them from time to time for various financial years could be accepted as declarations for the period in question in the light of authorities finding that declaration sent by certificate of posting being not acceptable.
2. Ld. Counsel Shri S.S. Radhakrishnan appearing for the appellants submits that there is no dispute about appellants having filed from time to time the declarations in terms of rules of Modvat credit and availing benefit of the scheme. He submits that they had maintained the inputs registers and RT 12 returns had been accepted and assessed. There were certain discrepancies in the RT 12 returns which for the period in question also and the said discrepancies also, on being pointed out by the department, were rectified. It is the contention of the ld. Counsel that for the relevant period when assessments had been taken on RT 12 returns and even mistakes rectified, the audit or the department did not raise the issue of appellants not having sent the declarations in terms of the Modvat rules. It is his contention that for the year 1994, appellants were under the impression that declarations could be sent by post also and hence the concerned clerk instead of personally giving and handing over and taking dated acknowledgement to avoid delay had sent it by post. He contends there is no rule directing the appellants not to send by post and there was no allegation of fraud or collusion with the postal authorities in obtaining the certificate of posting acknowledgement from the postal authorities. There is no illegality or an attempt by appellants to defraud revenue as they had been filing declarations and the same had been accepted. There was no change in the manufacture of final product and the inputs had remained same throughout various financial years. Hence the plea of the department raised subsequently by issuing show cause notice that they had taken Modvat credit without filing declarations is not sustainable. He submits that the Tribunal had an occasion to examine a similar issue in large number of cases and had held that if the party had filed declarations and the same had been acted upon by the department and then failure to file subsequent declarations should not be viewed strictly as it is only a procedural infraction. In this regard, he relies on the following judgments :-
(a) McNally Bharat Engineering Co. Ltd. v. CCE, Patna – 1994 (74) E.L.T. 680 (T) wherein there was no dispute about the appellants’ having filed declaration in the year 1986 and availing benefit of Modvat credit. Proceedings had been initiated for not filing the declarations for subsequent period. However, the Tribunal overruled the view of department and held that declarations filed in 1986 in general terms could also be accepted as department had accepted the Gate Passes and RG 23A Part I and Part II statements and RT 12 returns had been assessed.
(b) Orient Steel Industries Ltd. v. CCE, Calcutta – 1998 (98) E.L.T. 615 (T) wherein also declarations had not been made in strict terms for more than six years before issue of SCN. Therein the Tribunal had held that it was only a procedural infraction as from time to time department had been accepting RT 12 returns and assessing the same including approval of classification list.
(c) Wox Coolers P. Ltd. v. CCE – 1993 (63) E.L.T. 637 (T) wherein also the declarations had been initially filed by the party and therefore Tribunal held that there was no need to file fresh declaration when limitation of exemption was crossed and Modvat credit availed especially when both inputs and final products remained same.
(d) Standard Detergents Pvt. Ltd. v. CCE, Kanpur – 1995 (76) E.L.T. 136 (T). In this case also declaration was filed by the assessee intimating about the details subsequently when they crossed the limit in terms of the notification and the same had been intimated to the department. However, the department initiated proceedings stating that they had not filed a separate declaration. Again, the Tribunal overruled the said view of the department as initial declarations had been accepted and acted upon by the department and hence there was no need to file fresh one.
(e) Suresafe Glass Works (P) Ltd. – 1996 (83) E.L.T. 328 (T). In this case also appellants had been availing small scale exemption and after crossing the exemption limit availed Modvat credit. They had filed declarations initially which were held by the Tribunal to be sufficient and overruled department’s plea that on crossing limit, they were required to file fresh declaration.
(f) Universal Cables Ltd. v. CCE, Indore -1996 (83) E.L.T. 687 (T). In this case also a similar situation raised and the Tribunal overruled departmental view that party was required to file fresh declaration on every occasion.
3. Ld. DR Shri Sudarsan submits that these are fresh plea raised by them and they never raised before the original authority about this matter. He also submits that the present citations were not shown to the authorities below. Therefore, he submits the matter may be remanded for de novo consideration.
4. On careful consideration of the submissions, we notice that the issue before the Commissioner (Appeals) was very short one and as to whether the declaration sent by certificate of posting was required to be accepted or not ? The facts of the case clearly shows that appellants had been filing declaration and availing Modvat credit for the periods June, 1994 to March, 1996. The period for which they had availed Modvat credit by post i.e. ‘Certificate of Posting’ was 8-6-1994. The department meanwhile before issue of SCN had been assessing RT 12 returns and had also pointed out certain discrepancies and got the same rectified. The classification list had also been approved. It remained on record that there was no change in the manufacturing process with regard to utilization of the same inputs through-out the period for manufacture of final product. The department’s claim in the SCN is that for the period in question, assessee ought to have filed declaration in person and taken dated acknowledgement and earlier declarations and assessments made in RT 12 returns could not be a ground for regularising the Modvat credit obtained. The department’s view is that there has to be a declaration and it is mandatory provision under Rule 57G and non-filing of declaration and obtaining acknowledgement itself is sufficient to deny Modvat credit. Although there is no specific provision under Rule 57G for submitting Modvat declaration by post, there is a clear direction that they shall file declaration and obtain acknowledgement. However without going into this question, the matter could be disposed of on the plea raised by the ld. Counsel that earlier declarations will continue to be in operation as there was no change in the manufacturing process. This plea has been accepted by the Tribunal in similar circumstances in the above noted judgments. In this case also there is no dispute that appellants had filed declarations for the earlier period which had been accepted and even for the present period in question RT-12 returns had been assessed and discrepancies noted had been rectified and even the classification list had been approved and all the relevant registers under Modvat rules had been maintained. The same had been scrutinized and checked, yet the department was of the view that there was no declaration for this particular period and hence Modvat credit was required to have been denied. We notice that, as noted earlier, there was no dispute about declarations having been filed for the earlier periods. What we are required to consider is as to whether those declarations could be accepted for the period in question notwithstanding the plea raised by appellants that they had sent a declaration by Certificate of Posting. Without going to that question, we hold that the previous declarations having been accepted and RT 12 returns assessed and accepted, the same would continue for the period in question in the light of judgments noted (supra) which have not been reversed and are continuing to be in force. Ld. DR has not been able to show that the citations referred to by Counsel have been upset by the Larger Bench of the Tribunal or by any judgment of the High Court. In that view of the matter, following the ratio of cited judgments above, we set aside the impugned order and allow the appeal with consequential relief, as per law.