Full Judgment
1. The short question that arises for consideration from order in Appeal No. 105/98 (M-III) dt. 31.5.1999 is as to whether the appellants are entitled to avail Modvat credit after filing declaration under Rule 57H, despite the inputs having been utilised in the manufacture of final product and having cleared by them? The Commissioner (Appeals), in the impugned order, has noted that the Rule 57G was filed on 28.11.1996. The declaration under Rule 57H was filed on 13.1.1997 while the credit had been taken prior to this date i.e. 28.11.1996. He has noted that the transitional credit under Rule 57H has to be allowed to the assessee by the Assistant Commissioner after due verification of the stock if found necessary. He has noted that as the stocks were not available, therefore, the denial of credit and imposition of penalty by the Assistant Commissioner is justified. The Commissioner (Appeals) has justified the action and have not agreed with the Tribunal decisions cited before him rendered in the case of Safex Fire Services , Swastik Metal Works reported in 1991 (56) ELT (T) : 1991 (35) ECR 1646 (T-NRB) wherein it has been laid down that no time limit for filing declaration under Rule 57H has been specified and that a liberal approach is called for. Ld. Counsel submits that the issue is now covered in their favour by the Judgment rendered by the Madhya Paredesh High Court in the case of Gilt Pack Ltd. v. ACC, Indore reported in 1994 (69) ELT 222 (M.P) : 1994 (52) ECR 1 (MP) based on that Modvat credit for transitional provision is not deniable on the ground that the pre declaration inputs were not available for verification as being not in stock. It has been noted that the second limb of Rule 57H of CEA, 1944 did not require that such should be lying in the stock. It has been laid down that the quasi judicial authority should decide the matter objectively keeping in mind the purpose behind he rule or law. Ld. DR submits that as the inputs were not available the authorities did not grant the benefit.
2. On a careful consideration, I notice that the issue is fully covered by the Tribunal decision and the Judgment of the High Court of Madhya Pradesh rendered in the case Gilt Pack Ltd. v. ACC (supra). The second limb of Rule 57H itself did not require such inputs should be lying in the stock. This matter has been gone into in great detail by the Hon'ble High Court of Madhya Pradesh and the Tribunal and the Commissioner was not justified in not following the ratio of the Judgments. Respectfully following the citations referred before me, the impugned order is set aside and the appeal is allowed with consequential relief, if any.