Judgment:
1. The Commissioner (Appeals) in the impugned order relying on the decision of this Tribunal in the case of Seven Hills Papers (P) Ltd. v.C.C.E. reported in 1997 (95) E.L.T. 522 (T) held "I find that the subject case is fully covered either ratio of the decision of the CEGAT and as mentioned above and I hope that the adjudicating authority was competent to condone the delay". Being aggrieved by this order, Revenue has filed this captioned Appeal.
2. The facts of the case in brief are that the Respondents are engaged in the manufacture of Oxygen, Nitrogen, Argon Gases and Compressed Air.
The Respondents have been receiving capital goods during the period 12-2-1994 to 11-3-1995; that they got registered with the Central Excise office on 15-1-1995 and applied for registration under the Factories Act on 15-3-95. Capital goods were received in March, 1995 and commercial production commenced on 29-3-1995. The Respondents filed a declaration under Rule 57Q on 29-3-1995. Subsequently an application for condonation of delay was also filed. Revenue alleged that since the capital goods were received during the period 12-2-1994 to 11-3-1995, the Respondents herein should have filed the declaration on the date of receipt of first consignment as was clarified by the Board in its Circular No. 88/88/92-C.E., dated 26-12-1994 and since they did not file the declaration at the time of first receipt of the capital goods, therefore, they could not take Modvat credit on capital goods. The Asst. Commissioner adjudicating the case observed that the party had filed declaration within three months time from acquiring status of a manufacturer and after the factory coming into existence; that sufficient cause has been shown for delay in filing the declaration under Rule 57T of Central Excise Rules; he condoned the delay in filing the declaration under Rule 57T. He further held that the assessees' declaration dated 29-3-1995 be considered as having been made on 5-1-1995 and accordingly date of receipt of the capital goods in the factory earlier shown as 12-2-1994 to 11-3-1995 would be considered as having been covered by their declaration made on 29-3-1995. He dropped the proceedings Revenue reviewed this order and filed an appeal before the Commissioner (Appeals) who held as indicated in the preceding paragraph.
3. Shri R.D. Negi, ld. SDR appears for the Revenue and submits that in the instant case, capital goods were received in the factory during the period 12-2-1994 and 11-3-1995 and the Modvat declaration was filed on 29-3-1995. Therefore, most of the period during which capital goods were received was beyond three months limit: that the adjudicating authority has wrongly held that the party had obtained the status of a manufacturer only on 5-1-1995 when they obtained Central Excise registration and started production on or after 5-1-1995; that before that they were not manufacturers and as such they were required to follow procedure under Rule 57Q of the rules regarding filing Modvat credit declaration with effect from 12-2-1994; that Modvat declaration under Rule 57T of the Rules was required to be filed on 12-2-1994 or before; that the fact remains that the factory came into existence subsequently and did not get registered with the Central Excise Department under Rule 174 of the Central Excise rules before 5-1-1995 is not material. Ld. DR submitted that this position stands clarified by Central Board of Excise and Customs Circular F. No. 267/118/94-CX.8, dated 26-12-1994 (Circular No. 88/88/94-CX). It was contended by the ld. DR that the contention of the assessee that Board's Circular under reference would have retrospective effect and that it does not apply here as the circular was issued on 29-3-1995 and Modvat declaration was filed on 29-3-1995. Ld. DR also submitted that the findings of the adjudicating authority that the party correctly filed Modvat declaration within three months after acquiring the status of manufacturer is not correct; that the relevant factor for filing of Modvat declaration is the date of receipt of capital goods and not date on which the party acquires the status of manufacturer or registered dealer as discussed. Ld. DR also contended that the adjudicating authority has wrongly ordered that the declaration dated 29-3-1995 be considered as having been made on 5-1-1995 and the date of receipt of capital goods in the factory earlier shown between 12-2-1994 to 11-3-1995 would be considered as having been covered by their declaration made on 29-3-1995. Ld. DR therefore prays that the appeal may be allowed.
4. Ms. Reena Kher, ld. Counsel appearing for the Respondents submits that the Circular issued by the Board on 26-12-1994 had been relied by the appellants. She submits that this Circular was issued on 26-12-1994 and circulated as Trade Notice on 17-1-1995; that capital goods have been received from time to time right from 12-2-1992 to 11-3-1995; that a circular can be operated only prospectively; she submits that the circular is in the form of facility and was issued to, enable the Department to receive declaration in case where registration of factory had not been done; that a circular was not in the nature of a mandatory requirement. Ld. Counsel submits that under Rule 57T, a declaration has to be filed within a maximum period of three months from the date of receipt of goods in the factory; that factory has been defined in Section 2(e) of the Central Excise Act as a premises where manufacturing activity is ordinarily carried out; that prior to the registration of the premises, there was no factory and no manufacturing activity was being carried on there; that in these circumstances, Rule 57T would operate only with effect from 5-1-1995. In support of this contention, ld. Counsel cited and relied upon that the decision of this Tribunal in the case of C.C.E.,, Chennai v. Sivagurunathan Synthetics (P) Ltd.Seven Hills Papers (P) Ltd. v. CCE reported in 1997 (95) E.L.T. 522 (T) and in the case of Alufluoride Ltd. v. CCE, Visakhapatnam reported in 1999 (113) E.L.T. 572 (T). Ld. Counsel submitted that the case was fully covered by the decision of this Tribunal in the above case and therefore prays that the impugned order may be upheld and the Appeal may be rejected.
5. We have heard rival submissions and also perused the case law cited by ld. Counsel for the Respondents. We have also perused the Rule 57T and proviso to this rule which specifically requires, that every manufacturer intending to take credit of the duty paid on the capital goods under Rule 57Q shall file a declaration with the Asst.
Commissioner of Central Excise having jurisdiction over his factory indicating the particulars of the capital goods, description of the final product manufactured in his factory and such other information as the said Asst. Commissioner may require and shall obtain the dated acknowledgement of the said declaration. As it stood at the material time there was a provision provided that where a manufacturer was not in a position to make the declaration under Sub-rule (1) and makes the declaration subsequently but within the period of one month or such other period as might be allowed by the said Asst. Commissioner,for a maximum period of another two months from the date of receipt of the said capital goods in the factory. The Asst. Commissioner on sufficient cause being shown may condone delay for filing the declaration. Ld.
Counsel for the Respondents submitted that this rule read with proviso provides for making a declaration within three months from the date of receipt of the capital goods in the factory. She submits that factory has been defined under Section 2(e) of the Central Excise Act. She submits that the Respondents got the premises registered on 5-1-1995 and therefore as the Respondents herein had filed an application for condonation of delay along with the declaration and the delay was condoned by the Asst. Commissioner. Therefore, the period of three months should be counted from 5-1-1995 and not from the date of receipt of first consignment i.e., on 12-2-1994 and for subsequent consignment from the date of their receipt in the factory. We find that this contention of the ld. Counsel for the Respondents is strictly in accordance with the requirement of the rule. More over, we find that similar issue came up for decision before the Tribunal in the case cited and relied upon by the Respondents herein. Having regard to the decision in the above case and following them, we hold that Modvat credit will be admissible to the Respondents herein as they had fully complied with the mandatory requirement of filing the declaration within three months from the date of receipt of capital goods in the factory. In this view of the matter, we do not find any infirmity legal or factual in the impugned order. The impugned order is therefore upheld and the appeal is rejected.