Per S.L. Peeran :

Revenue is aggrieved with the order of the Commissioner by which he has held that assessees have filed the declarations within the stipulated period under Rule 57T from the date of commencing of their production and that they have rightly taken modvat credit in respect of capital goods. The findings recorded by him in para-5 is noted herein below:-

"5. Unless Rule 57T (1) every manufacturer intending to take credit of the duty paid on the capital goods should file a declaration indicating particulars of capital goods, description of final products etc. The second proviso clause says that where a manufacturer is not in a position to do so and makes such a declaration subsequently, but within a period of one month or such further period as may be allowed by the Assistant Commissioner for a maximum period of another two months from the date of receipt of said capital goods in the `factory', The Asst. Commissioner may, on sufficient cause being shown, condone the delay in filing the declaration. As per Section 2 (e) of the Central Excise Act, `factory' means `a place wherein excisable goods are produced or any process in connection with production is carried out'. Thus, a factory comes into being only after it is registered under the Central Excise law particularly since we are not dealing with a case of suppression or clandestine removal of excisable goods. From the copies of the records submitted by the appellants, it is seen that the factory was registered under Central Excise law and the Registration Certificate No. 6/99 under Rule 174 was issued on 6.4.99 only. There are a number of decisions that the assessee is bound to follow the Central Excise rules and procedures only from the date of Central Excise registration. Here in this case the registration certificate was issued on 6.4.99 and the declaration was filed on 7.5.99. The time limit for filing the declaration/condonation of delay etc. therefore runs from 6.4.99 and accordingly the declaration was filed well within time. Therefore, the appellants are eligible for the capital goods MODVAT credit."

2. Heard Ld. SDR Shri G.S. Menon for appellant-revenue and Shri T. Ramesh, Ld. Counsel appearing for respondent-assessee.

3. Ld. SDR took me through the grounds of appeal and submitted that the period in question from which the capital goods were received by the assessee was from May'96 to Nov'98 and they had filed the declaration on 7.5.99 requesting for condonation of delay, if any, and the same was rejected by AC on 14.5.99. On filing the declaration, they took credit on capital goods. Therefore, show cause notice dated 5.8.99 was issued proposing to disallow the credit as well as to impose penalty. The Asst. Commissioner had dropped penalty proceedings, however confirmed the demands in the SCN as assessee had taken modvat credit after the expiry of the period. However, the Commissioner (Appeals) has passed the above noted order which is not in terms of law and requires to be set aside.

4. Ld. Counsel points out that the Commissioner's finding given is in terms of law. They could not have taken credit unless the factory commenced its production. For all practical purposes, it is the date of registration of the factory, from which date, taking credit has to be reckoned with and not the date of receipt of capital goods. Therefore, they filed the declarations within the stipulated period from the date of registration of the factory and therefore the Commissioner (Appeals) order is just and proper. He relies on the WRB's ruling in the case of JBM Tools Ltd. Others Vs. CCE Pune reported in 2002 (48) RLT 117 which also holds that delay in filing the declaration even after the expiry of three months is condonable and credit is admissible. He submits that this ruling has been rendered in the light of earlier rulings of the Larger Bench rendered in the case of Kamakhya Steels Pvt. Ltd. Vs. CCE Meerut reported in 2000 (40) RLT 575. He submits that the issue is no l