The amendment notification and circular instructed that minor procedural lapses in filing modvat declaration should be ignored while considering the modvat claim in pending cases where the substantive conditions of modvat credit were fulfilled.

K. Raviraja Pandian, J.

This Appeal is filed against the Final Order No.131 of 2005 dated 21. 2005 made by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai.

2. The question of law formulated for entertainment of the appeal are as follows:

"1. Whether the credit of duty on capital goods can be allowed when the respondents have not filed statutory declarations which is a mandatory provisions under Rule 57T(1) of CER 1944?

2. Whether credit of duty on capital goods can be allowed when the respondents have not intimated about the date of receipt of capital goods into the factory which is a mandatory provisions under Rule 57T(2) of CER 1944?

3. Whether the Honble Tribunal is right in holding that the Revenue has no case that any of the substantive conditions for capital goods credit was not fulfilled by the respondents when the respondents have violated to sub-rules namely Rule 57T(1) and 57T(2)?"

3. Though the questions of law are framed as above, the facts of the case proceed as follows:

The first respondent herein being manufacturers of coated boards, printed boards, printed cartons and printed slides falling under Chapter 48 of the Central Excise Tariff Act, 1985, taken capital goods credit of a sum of Rs.19,92,778/-in their RG 23C Part II Register during the period July to November 1995 in respect of capital goods received by them from time to time and taken into use. The appellant/Department was of the view that the respondent/assessee have not fulfilled the statutory obligation prescribed under Rule 57T of the Central Excise Rules, 1944 by not filing statutory declaration before receipt of capital goods and by not giving intimation in respect of receipt of capital goods into their factory. Therefore, the amount of Rs.19,92,778/-taken as credit was irregular. Accordingly, the Revenue issued a show cause notice dated 11. 2006 calling upon the respondent assessee to show cause as to why a sum of Rs.19,92,778/- erroneously taken credit of should not be disallowed under Rule 57U and as to why penalty should not be imposed under Rule 173Q(i) (bb). After due enquiry, the Assistant Commissioner of Central Excise by his order dated 3. 1998 allowed the credit for a sum of Rs.4,46,436/- and disallowed the remaining amount of Rs.15,46,362/- (Rs.14,43,365 + Rs.1,02,997) under Rule 57U and imposed penalty in a sum of RS.3 lakhs under Rule 173Q(i)(bb). Aggrieved by the order of the Assistant Commissioner, the respondent filed a statutory appeal before the Commissioner (Appeals), who by his order dated 13. 2000 allowed the credit of Rs.1,02,997/-for which statutory declaration was filed late but before condonable time limit of three months and confirmed the remaining part of the order of the Assistant Commissioner. The respondent carried the matter on further appeal before the Customs, Excise and Service Tax appellate Tribunal, which by its order dated 21. 2005 set aside the order of the Commissioner (Appeals) impugned therein by allowing the appeal. The correctness of the same is put in issue in this appeal by formulating the above questions of law for entertainment of the appeal.

4. Learned counsel appearing for the revenue/appellant submitted that Rule 57T as was obtaining during the relevant time required the manufacturer to file a declaration indicating the particulars of the capital goods, the description of the final product manufactured in his factory and such other information as the Assistant Commissioner might require. If the manufacturer was not in a position to make declaration within the period, he could make an application within a period of one month or such further period as might be allowed by the Assistant Commissioner within the maximum period of two months from the date of receipt of the capital goods in the factory. The manufacturer intending to take credit of the duty paid on capital goods under Rule 57Q shall intimate the particulars regarding the full description of the