indica Chemical Industries P. Vs. Commissioner of C. Ex. - Court Judgment

Excerpt:

.....taken but utilised only after dispute is finalised. in any case there was a genuine belief that the declaration in respect of the impugned goods had already been filed with the department and this is on record; and this fact has not been denied.4. ld. dr reiterates the departmental arguments and submits that appellants ought to have filed the revised declaration.5. i have heard both sides. the fact of declaration already on record in respect of the impugned goods has not been disputed. there is no allegation otherwise except in regard to the declaration that appellants are not entitled to modvat credit. prima facie there appears to be considerable merit in the arguments of the ld. consultant regarding genuine plea advanced by them in regard to the declaration already filed. taking into account the facts and circumstances of the case i am of the view that appellants at this stage have succeeded in making out a prima facie case in their favour. i therefore waive the requirement of pre-deposit of rs. 52,702/- and rs. 49,860/- and penalty of rs. 50,000/- till the pendency of the appeal and stay recovery thereof.

Judgment:

1. All these stay applications involving common question of law and facts were taken up together and are being disposed of through this common order.

2. The Applicants in one case seek waiver of pre-deposit of Rs.52,702/- and another case waiver of pre-deposit of Rs. 49,860/- and penalty of Rs. 50,000/-.

3. Arguing in support of Applications the ld. Consultant for the Appelants submits that the issue relates to admissibility of Modvat credit in case of HDPE sacks. The Department has denied credit on the ground that the declaration under Rule 57G had not been filed. The ld.Consultant submits that there was a dispute in regard to classification of HDPE sacks. Subsequently it was clarified that these were classifiable under Tariff Heading 39. They had, there-fore, filed declaration claiming the benefit of Modvat credit. Subsequently however under the exclusion clause they could not take credit in respect of the {TOPE sacks and the matter was in dispute. Subsequently however the exclusion clause was deleted with effect from 16-3-1995 and they started availing Modvat credit in the bona fide belief that they had already filed declaration. It is not therefore the case of taking Modvat credit without filing declaration. The declaration already filed cannot be deemed to lose validity merely because at that time the question of admissibility of credit in case of HDPE sacks was in dispute. In any case if declaration was not filed Modvat credit cannot be denied on mere technically and a declaration could be filed subsequently also. Even C.B.E.C. vide its Circular No. 4/91-C.E., dated 14-2-1991 had clarified that in case of dispute the Modvat credit can be taken but utilised only after dispute is finalised. In any case there was a genuine belief that the declaration in respect of the impugned goods had already been filed with the department and this is on record; and this fact has not been denied.

4. Ld. DR reiterates the departmental arguments and submits that appellants ought to have filed the revised declaration.

5. I have heard both sides. The fact of declaration already on record in respect of the impugned goods has not been disputed. There is no allegation otherwise except in regard to the declaration that appellants are not entitled to Modvat credit. Prima facie there appears to be considerable merit in the arguments of the ld. Consultant regarding genuine plea advanced by them in regard to the declaration already filed. Taking into account the facts and circumstances of the case I am of the view that appellants at this stage have succeeded in making out a prima facie case in their favour. I therefore waive the requirement of pre-deposit of Rs. 52,702/- and Rs. 49,860/- and penalty of Rs. 50,000/- till the pendency of the appeal and stay recovery thereof.