ORDER
J.H. Joglekar, Member (T)
1. The appellants in this case received certain materials being inputs on 8.9.1992. They filed a declaration for claiming modvat as prescribed under Rule 57G on 21.9.1992. Thereafter on receipt of the documents, they took credit on 26.9.1992. After issue of Show Cause Notice, the Assistant Collector disallowed the credit so taken on the ground that the goods were received prior to filing of a declaration under Rule 57G, and that the transitional provision in the form of Rule 57H as it stood at the material time did not cover the situation and that the prior permission of the Assistant Collector was not taken before availing of the facility of the transitional provisions. The Collector (Appeals) in his order dated 30.3.1995 upheld the lower order giving rise to the present appeal.
2. Shri Y.D. Gera, Excise Manager of the appellant company in his submission relied upon a quotation from “Guide to Modvat Part I” issued by the Central Board of Excise and Customs which permitted a manufacturer to take credit on receipt of the covering documents but permitted the utilisation of the inputs immediately on receipt thereof. He submitted that his case was covered by Sub-clause (b) of clause 1A of Rule 57H. He referred to the judgment of the Tribunal in the case of Swastik Metals v. CCE and claimed that no time limit was prescribed in the said rule for filing an application. He further claimed that in their judgment in the case of EMC Steelal Pvt. Ltd. 1993 (44) ECR 215, the Tribunal had held that there was no requirement as to the prior permission when availing of the facility under Rule 57H. He also cited the judgment in the case of Ballarpur Steel Industries Ltd. (sic) . Shri S.N. Ojha, JDR arguing for the department submitted that in case of Assistant Collector was found to have mis-interpreted the provisions of Rule 57H, he had no objection to the case being remanded for de novo consideration.
3. I have carefully gone through the cited judgments, the various records and have given careful consideration to the arguments advanced by both the sides.
4. Rule 57G prescribe that modvat credit can be taken only after filing a declaration of the intention to do the same by the manufacturers. Certain situations would exist requiring relaxation from the rigours of this rule. These are provided under Rule 57H as transitional provisions to such contigencies as narrated in Sub-rule (a) thereto. The first is where such inputs were lying in stock in the factory or were received in the factory after filing declaration but before obtaining the dated acknowledgement. The second situation is where the inputs were used in the manufacture of final products which were cleared from the factory after filing the declaration. These two provisions are mutually exclusive. From the order of the Assistant Collector, it is clear that he has made an error in appreciating these two situations. He has presumed that both the conditions had to be satisfied whereas the rule makes it clear that these two situations are separate and not co-existent. Thus where the manufacturers are able to satisfy the Assistant Collector that these inputs were used in the manufacture of final products which were cleared from the factory after filing the declaration, the availment of credit is admissible. The Id. Collector also did not notice this grave mistake made by the Assistant Collector. The other belief of the Assistant Collector that for availment of provisions of this rule prior permission had to be obtained is also found to be without basis as determined in the citation made by the Id. Counsel.
5. In the result, the appellant succeeds. The case is remanded back to the Assistant Collector for determining whether the impugned goods were used in the manner prescribed under Rule 57H and for granting appropriate credit if he is so satisfied.
(Order dictated and pronounced in the Court).