Judgment:
1. As the issue involved in this appeal, filed by M/s. Colts Auto Ltd. is in narrow compass, we stay the recovery of the entire amount of Modvat credit disallowed to them and penalty imposed on them. We heard Shri Bipin Garg, learned Advocate, for the appellants and Shri Vipin Verma, learned JDR for the Revenue.
2. The appellants are manufacturing motor vehicle parts and are availing of Modvat credit of the duty paid on inputs. They shifted their workshop and entire business from Sector IV in Faridabad to Sector VI in Faridabad. Due intimation of shifting was given to the Jurisdictional Superintendent. The Modvat credit of the duty paid on inputs had been disallowed to them on the ground that they had not filed fresh declaration after shifting their factory premises to Sector VI, Faridabad. The Modvat credit is not disallowable for this reason in view of the amendment carried out in Rule 57G of the Central Excise Rules, 1944 by Notification No. 7/99, dated 9-12-1999 and Board's Circular No. 441/7/99-CX., dated 23-2-1999. It was mentioned in the said circular that Sub-rule (11) has been inserted in Rule 57G with a view to empower the Assistant Commissioner to allow credit of duty paid on inputs ignoring minor procedural lapses in filing the declaration or in the invoices based on which the credit has to be taken if the Assistant Commissioner is satisfied that inputs have suffered duty and are being used in the process of manufacture. In the present matter, it has not been disputed that the inputs have suffered duty and the same have been used in the manufacture of final products. The only reason for denying the Modvat credit is not filing of declaration. We, therefore, hold that the Modvat credit cannot be disallowed.
3. The learned Advocate also mentioned that the Modvat credit has also been disallowed in respect of inputs which had been sent directly to the job worker; that the appellants had followed the procedure as prescribed in Board's Circular No. 33/33/94-CX. 8, dated 4-5-1994; that the only mistake committed by them was that they had taken the credit in their books of accounts immediately; that, however, the said credit was not utilised by them. As it has not been disputed by the Revenue that the procedure for sending the inputs directly to the job worker was followed by the appellants, there is no reason to disallow the Modvat credit. Accordingly, we set aside the impugned order and allow the appeal. (Operative part of Order pronounced in open Court on 2-3-2005).