Customs, Excise and Gold Tribunal - Bangalore
Dai-Lchi Karkaria Ltd. vs The Commissioner Of Customs And Central ... on 18 October, 2006
Equivalent citations: 2007(116)ECC50, 2007ECR50(TRI.-BANGALORE)
ORDER T.K. Jayaraman, Member (T)
1. This appeal has been filed against the Order-in-Appeal No. 20/2004 dated 25.06.2004 passed by the Commissioner of Customs & Central Excise (Appeals), Hyderabad.
2. Shri Lalit Mohan Chandna, the learned Consultant, appeared for the appellants and Shri K. Sambi Reddy, the learned JDR, for the Revenue.
3. The learned Consultant stated that the issues in this appeal relate to denial of modvat credit by the Commissioner (Appeals) in the impugned order, due to the following reasons:
(i) Modvat credit of Rs. 32,247/- has been denied on the ground that no declaration has been filed before the receipt of the goods under Rule 57-T of Central Excise Rules. It has been held that the delay in filing declaration under 57-T is not condonable.
(ii) Modvat credit amounting to Rs. 2,69,146/- in respect of Cadmach Automatic Ultrasonic Ampoule Washing Machine and Ingersoll-Rand Air Compressors has been denied for the reason that the classification sub-headings 8422.10 and 8414.18 shown in the Invoice come under the excluded category and it is not within the powers of the Deputy Commissioner to alter the classification for giving Modvat credit benefit based on a letter of the supplier produced by the appellants.
3.1 The learned Consultant urged that it was actually a clerical mistake and that is why a letter from the supplier was produced. Further, he said that the correct classification has been declared by the supplier of the machine in his own jurisdiction. He actually produced the declaration filed under Rule 173 by Cadmach Machinery Co. Pvt. Ltd., Ahmedabad, from whom they received the machinery. In respect of the Ingersoll Rand Air Compressors, he urged that the Compressors meant for Air conditioning and Refrigerating machinery only are excluded for the benefit of Modvat and in the present case, the end use is for fluid dryers for drying drug intermediaries. The above point has been examined by the original authority for allowing the modvat credit.
3.2 As regards non-filing of declaration/late filing of declaration, the learned Consultant relied on the decision of the Tribunal in the case of Madras Cements Ltd. v. CCE, Trichy 2005 (192) ELT 902(Tri.-Chennai) wherein it is held that credit is not deniable merely because of non-filing/belated filing of declaration under Rule 57T of the Central Excise Rules, 1944.
4. The learned Departmental Representative relied on the following decisions to hold that the jurisdiction to decide classification of inputs rests with the Central Excise Authorities incharge of manufacture of inputs and the authorities in the jurisdiction of the recipient cannot alter the classification:
(i) TELCO v. CCE, Jamshedpur 2001 (136) ELT 305 (Tri.-Kolkata)
(ii) CCE, Bhubaneswar-II v. Sarvesh Refractories (P) Ltd.
4.1. As regards the delay in filing the declaration under Rule 57Q, the learned JDR relied on the decision of the Tribunal in Western Bio-Systems Ltd. v. CCE, Pune-I 2002 (149) ELT 386(Tri.-Mumbai) wherein it is held that the mandatory requirement of law when it is not complied with, the Assistant Commissioner has no power to condone the same.
5. We have gone through the records of the case carefully. An amount of Rs. 32,247/- being the credit taken on Capital Goods for which declaration under Rule 57Q was filed late has been denied in the impugned order. While the learned JDR cited decisions against the appellant, the learned Consultant cited the decision of the Chennai Bench in favour of the party. In the said decision, the learned Member has relied on the Board's clarification to the effect that modvat credit is not deniable on the sole ground of non-filing or belated filing of modvat declarations where a substantive condition for the credit were satisfied. In the present case, the fact that the Capital Goods have been received in the appellants' factory is not in dispute. Their usage is also not disputed. In these circumstances, relying on the Chennai Bench's decision, we are inclined to allow the modvat credit of Rs. 32,247/-.
5.1 Coming to the Cadmach Automatic Ultrasonic Ampoule Washing Machine, the credit has been denied for the reason that the classification 8422.10 shown in the invoice is excluded. The learned Advocate, in the course of personal hearing, showed us the declaration filed by the manufacturer of the above said machinery and in the declaration, the correct classification under 8422.10 for the machine has been indicated. In view of this, we accept the contention of the appellant that this is only a clerical error. This is not the case of deciding the classification of the item by the jurisdictional authority in respect of the recipient factory. This is only a decision based on correction of a clerical error. Therefore, the case-laws cited by the learned JDR cannot be made applicable. In these circumstances, we find that the decision of the original authority in allowing the credit is proper. The Commissioner (Appeals) was not correct in setting aside the decision of the original authority. Hence, we allow the modvat credit on the above machine.
5.2. As regards the Ingersoll-Rand Air compressor, the original authority, after satisfying that the compressor is being used in fluid driers for drying drug intermediates and not for refrigeration and air-conditioning machine (excluded category), has allowed the modvat. We do not find anything wrong in this decision.
6. In fine, the appellant is entitled for modvat credit to the tune of Rs. 3,01,393/-. Hence, we set aside the impugned order and allow the appeal with consequential relief, if any.
(Pronounced in open Court on 18 OCT 2006)