Whether the Cenvat can be claim after declaration under Rule 57 G was filed or not??

PJ/Case Laws/2011-12/1134

Prepared by
CA Rajani Thanvi
Bharat Rathore

Case: Hindustan Zinc Limited Vs. Commissioner of C.Ex., Jaipur

Citation: 2011(265) E.L.T. 402 (Tri. Del.)

Issue: Whether the Cenvat can be claim after declaration under Rule 57 G was filed or not??

Brief Facts: The appellant are engaged in manufacture of Zinc, Lead and Copper Sulphate Solutions. The appellant filed a Cenvat Claim under Rule 57 H of erstwhile Central Excise Rules, 1944 before adjudicating authority. The adjudicating authority partly allowed the refund and disallowed the balance credit amount. The appellant filed appeal before Commissioner (Appeals) on the grounds that adjudicating authority reject their claim without hearing and without issuing Show cause notice. The Commissioner (Appeals) remanded the matter for re-adjudication. Accordingly the adjudicating authority disallow the claim by order holding that he condition of Rule 57H were not fulfilled by the appellant. Thereafter, the appellant has taken credit with intimation to department that rejection of permission under Rule 57 H ibid did not preclude us from taking it and appellant utilised the credit towards the payment of duty on th finished goods. The department conducted the investigation and issued a Show cause notice to the appellants. The same was contested by the appellants and consequently the impugned order came to be passed.

Appellant’s Contention: The appellant submit that they had filed the declaration under Section 57H and as per provision of law comprised under Rule 57 G and 57 H as were in force at the relevant time , the appellant was required to seek permission of the department for utilisation of credit which were lying in stock fan or before 25/07/1991. The appellant was filed appropriate application in terms of rule 57 H. As far as inputs received or after 5/07/1991, there was no such requirement and those were received or utilised in terms of Rule 57 G. under the wrong belief that even in relation to certain inputs which were received after filing of declaration. The provision of law comprised under Rule 57 H would be attracted, we have filed an application to adjudicating authority seeking leave to avail the credit on the inputs received after declaration. Under Rule 57 H on 24/29^th October 1992. Since the provision of law comprised under Rule 57 H were not applicable, even though the concerned authority rejected the claim under section 57 H.

The appellant submit that they have intimated to adjudicating authority that rejection of claim under Rule 57H did not prohibit us to avail and utilise credit in terms of the provision of Rule 57G. The department neither communicates to us nor rejects the claim under Rule 57G and not issue a Show cause notice to us. The department issue show cause notice after utilisation of credit in January 2003.

The appellant further submit that in terms of the provision of law comprised under Rule 57G as were applicable to the facts of the case. And while rejecting the application under 57H, the authority had not disputed the claim of the appellant about receipt of the inputs after 25/07/1991.

The appellant further submit that the they have produce all relevant documents like RG23 A Pt-I and Pt.II and the invoices which ere sufficient proof of the fact and question of RT-12 return did not arise as there was no provision for the same at the relevant time.

Respondent’s contention:-The respondent submit that the appellant themselves have deposed that the goods in question were received by them prior to the filing of the declaration and the contention now sought to be raised about the receipt of those goods after declaration are purely after thought.

The respondent further submit that the appellant was not submit satisfactory documents proof regarding receipt of the input in question after the receipt of the declaration under Rule 57G. it was necessary for the appellants to produce satisfactory evidence in that regard andthey having failed to do so.

Reasoning of Judgment: - The Hon’ble Tribunal heard both side and considered that there was clear admission about the goods having been received prior to the filing of declaration, it is true that the Commissioner has made the said observation by referring to the pleadings in the appeal in the earlier proceedings. There is vast difference between a deposition and pleadings. There could be possibility of wrong statement offact in pleadings, either made unknowingly or by mistake. But it is not permissible to use such pleadings from one proceedings to other proceedings.

The Hon’ble Tribunal also find that the appellants might have made the said statement in the appeals before the commissioner (Appeals) in the earlier proceedings it will be required to ascertain the circumstances in which the said statement was made. Agains for that purpose, opportunity has to be given to the concerned party to putforth its say in that regard and in this case the same has not been done.

The Hon’ble Tribunal also observed that Adjudicating authorities while passing the order under Rule 57 H had nowhere stated that the goods were received prior to the filing of declaration. Indeed, if it was so, it was absolutely necessary for the authority to arrive at such finding in the order dated 17/05/2000 so that the party if aggrieved could have challenged the same. In the absence of such finding and that too read with letter dated 18/11/1998, it can not be contended that the goods were received prior to the declaration.

The Hon’ble Tribunal also observed that the most relevant documents in the form of invoices and RG 23A Pt. I and Pt. II and invoices were produce by the appellant and those documents were more than sufficient to establish the case of the appellants and in fact on scrutiny of those documents the authority had refused to grant the credit under Rule 57H. Being so the said finding also cannot be sustained.

The Hon’ble Tribunal considered that the goods having been received after the submission of declaration, the provision of Rule 57H were not attracted and in terms of the other provision of law in force, the appellant were lawfully entitled to avail and utilize the credit which they did in January 2003 and, therefore, the entire proceedings are totally bad in law.

Judgment:Appeal succeed and impugned order is set aside with consequential relief.

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PJ/Case Laws/2011-12/1134

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