ORDER
S.K. Bhatnagar, Vice President
1. Ld. Counsel stated that this is a stay explication filed w.r.t. to Order-in-Appeal passed by Commissioner (Appeals), Ghaziabad dated 26-11-1997. The matter relates to availment of Modvat credit. The appellants are manufacturing a number of items and they had filed a declaration in the normal course under 57A in respect of those items. Subsequently they started manufacturing a third item but by mistake did not file a fresh declaration or a supplementary declaration for some time, initially they had missed doing so but subsequently rectified the mistake by filing the required declaration after a gap of about two months when the requirement came to their notice. They also filed an application for condonation of delay in filing the said declaration. Department however has proceeded in the matter without considering their condonation application and a show cause notice has been issued and both at the A.C. and the Commissioner’s level ex parte orders have been passed and the benefit has been denied to them. It was their contention that there were reasons why they could not appear but the main thing is that both the inputs and the final product are covered by the Modvat scheme and there is no dispute that the inputs were duty paid and were utilised in the manufacture of the final product about which a classification list was filed and was in existence. Further more., the A.C. had power to condone the delay in terms of Rule 57G(5) and the inputs and the final product were covered by 57A and it is also well settled that credit taken in respect of one input could be utilised for payment of duty on any of the final products.
2. Ld. D.R. opposed the prayer saying that they had not filed the declaration before availing the credit and there is no reference to their condonation application in either the Order-in-Original and the Order-in-Appeal. Further more, it is not correct to say that Modvat could be availed suo motu and utilised for the purpose of paying duty on an item regarding which declaration had not been filed.
3. Ld. Counsel draws attention to the copy of the condonation application filed on 24-4-1996 relating to the item and the period in question.
4. I have considered the above submissions. I observe that prima facie there is a lot of force in the contention of the appellants that once the condonation of delay application had been filed it was required to be duly dealt with before proceeding further in the matter and there is no dispute that the inputs and final products were otherwise covered by Modvat scheme. Therefore at this stage the appellant’s were justified in making a prayer for waiver of pre-deposit. The request is therefore accepted. Stay granted. To come up for hearing in due course.