Order date: 27 September 2022

Fact:

• The Appellant, M/s. Ronix Polymer Private Limited, a company filed a declaration on 20.12.1994 under Rule 57G of the Central Excise Rules, 1944 indicating their intention to avail of transitional Modvat credit benefit.
• The Appellant obtained registration with Central Excise Department on 17.06.1994 and filed a declaration on 20.12.1994 under Rule 57G of the Central Excise Rules, 1944 indicating their
• intention to avail of transitional Modvat credit benefit.
• The said SCN was adjudicated by the Ld. Additional Commissioner, Central Excise, Kolkata vide Order-in-Original dated 11.05.1999 and the demand was confirmed as proposed in the SCN, including the issuance of notice beyond the prescribed period of six months, by invoking the extended period of limitation.
• The Hon’ble High Court directed to deposit the entire dues within the stipulated timeline. It was also directed that subsequent to the said deposit, the matter will be decided by Commissioner afresh. The assessee accordingly deposited the amount in compliance with the order of the Hon’ble High Court.

Issue

• Whether the Appellant is eligible to avail of the transitional Modvat Credit and whether the proceedings initiated vide the impugned SCN is legal.

Order

• The authorities find that the Ld. Joint Commissioner has observed that the assessee has suppressed the fact of availing the benefit of SSI exemption under Notification No. 1/93-CE by not paying the duty on finished goods during the period in dispute i.e. 1994-95, which the allegation was not made in the SCN dated 02.04.1996 and, therefore, the proceedings have traveled clearly beyond the scope of allegations made in the SCN which cannot be legally sustained.
• The authorities find that the very basis of invocation of the extended period of limitation is the alleged wrong availment of exemption notification, the only allegation in the SCN was with regard to availing of transitional credit of Modvat in terms of Rules 57G and 57H. Both the Authorities below have duly noted that the required declaration under Rule 57G was duly filed by the assessee on 20.12.1994 wherein the assessee communicated its intention to avail.
• The authority observed that even after having noted the aforesaid compliances, the authorities below have erred in invoking the extended period of limitation. Since the appeal is decided on the legal grounds stated above, the authorities are not inclined to examine the correctness or eligibility of Modvat transitional credit on merits.
• For the above reasons the authority said the duty demand cannot be legally sustained, the same is set aside. The appeal is thus allowed with consequential relief as per law.