Customs, Excise and Gold Tribunal - Tamil Nadu
Collector Of Central Excise vs Triton Valves Ltd. on 1 October, 1992
Equivalent citations: 1993(41)ECC276
ORDER
31-3-1992 S. Kalyanam, Member
1. The appeal has been filed by the Collector of Central Excise, Bangalore against the impugned order of the Collector of Central Excise (Appeals), Madras dated 31.5.88. The Respondent herein filed a cross-objection against the same impugned order against the findings that the declaration filed by them under Rule 57-G(1) of the Central Excise Rules, 1944 is not valid.
2. The respondent herein filed a declaration on 31.3.86 for availing Modvat credit and described the input under Rule 57-G of the Central Excise Rules, 1944 (hereinafter referred to as 'the rules') as "copper billets". The respondent received copper wire bars as inputs and utilised it in the manufacture of the final products. The credit taken by the respondent was disallowed on the ground that there was no proper declaration in terms of Rule 57-G of the Rules in regard to the actual input used. The respondent preferred an appeal before the lower appellate authority who while holding that the declaration filed by the respondent under Rule 57-G(1) is not correct, set aside the order of the Assistant Collector, Mysore dated 13.1.88 on the ground that the Assistant Collector cannot re-open the R.T.12 assessments, even if they are wrong because the Assistant Collector has no power of review or appellate jurisdiction over the order of assessment of the Superintendent who is the proper officer too assessing the R.T.12s under Rule 57-I of the Rules. The learned SDR in the appeal (No. 585/88) filed by the Department contended that the lower appellate authority having found that the declaration filed by the Respondent under Rule 57-G(1) is not valid and correct, should have disallowed the credit taken. It was further urged that it is only the Assistant Collector who has got jurisdiction to initiate proceedings in respect of wrong credits taken under Rule 57-I.
3. Shri Parameswaran, Id. Counsel for the Respondent submitted that the find in the impugned order that the declaration filed under Rule 57-G is not correct, is not tenable in law. It was urged that though the input was described as "copper billets" in the declaration filed on 31.3.86, copper billets and copper wire bars are both classifiable under same tariff heading and if they had filed the declaration for 'copper billets', the same should be taken to cover 'copper wire bars' as well. It was further submitted that it is not disputed by the Department that the respondents have purchased the inputs from Hindustan Copper Ltd. under cover of duty paying documents and these duty paid inputs were used in their end-product. The description of copper billets, instead of copper wire bars, even if it is not correct, should be construed to be a procedural irregularity since both the inputs and the final products have been covered by the provisions of Notification No. 175/86 dated 1.3.86 as amended. Reliance was also placed on the ratio of the ruling of he West Regional Bench in the case of "Collector of Central Excise v. Goodlass Nerolac Paints" - 1986 (8) ECR 639 (CEGAT-Bombay) and also the ruling of the South Regional Bench in the case of "Collector of Central Excise, Bangalore v. Vikrant Tyres Ltd." -- 1986 (9) ECR 616 (CEGAT-SRB).
4. We have carefully considered the submissions made before us. It is not disputed by the Department that the inputs received by the respondent were duty-paid and were actually used in relation to the manufacture of the end-product. The evidence on record shows that at the relevant time copper billets and copper wire rods fell under the same tariff heading and also sub-heading attracting the same rate of duty. Therefore, in the above factual background when the duty-paid inputs have been used in the manufacture of the end-product, the mistake in the input description in the declaration in the above context should be construed to be only a procedural irregularity. There is no revenue implication. It is well settled that credit cannot be disallowed if the description is not exact and is broad-based so long as the inputs have been utilised in the final products. It has also been clarified by the Board in their circular F.No. 263/17/87-CX dated 9.2.88 that if the private/statutory records maintained by the assessee show that the inputs have been received and used in the manufacture of the final product and declarations giving broad descriptions/chapters have been filed, as required under Rule 57-G, then the credit should not be disallowed. We, therefore, hold that the respondents would be entitled to the Modvat credit and in this view we do not feel called upon to pronounce on the question raised by the respondent in the cross-objection. In the result the appeal filed by the Department and also the cross-objection stand dismissed.
V.P. Gulati, Member
5. I observe that the Respondents have been called upon by the original authority to pay the amount of credit taken during the period 7.4.86 to 24.6.86 in respect of 23.533 MTs of copper described as copper wire rods when the declaration filed under Rule 57-A read with Rule 57-G was for copper billets. The demand is for the reason that there was no declaration filed on 31.3.86 at the relevant time for copper wire rods. I observe that both the item i.e., copper wire rods and billets at the relevant time fall under the said tariff heading 7401 which description cover unwrought copper. The said tariff entry 7401.00 is as under:
Unwrought copper in any form (refined or not, including Bitter Copper, Copper matte and cement copper, including ingots, notched Bars, Blocks, slabs, billets, slots, pellets, cathodes and cakes.
It is in the chapter notes that a distinction has been made between the copper billets and wire rods. No doubt the two types are differently known in the trade but the fact remains that the Respondents' declaration with reference to manufacture of the end-product is covered by tariff heading 7401 carrying the broad description "unwrought copper". The Respondents in the covering letter as stated in the memorandum, before the Collector, have described the input as copper. I further observe that issue relates to the early stage of the introduction of the Modvat Scheme when full understanding was not there among the assessees and even among the Departmental officers as evidenced by the number of instructions that had to be issued by the authorities during the early stage of the Modvat Scheme clarifying the requirements of the law. It is not as if the Respondents did not come on record as to the use of the copper for the purpose of the manufacture of the final products. The Respondents having filed the declaration in respect of copper in the covering letter and which can be taken to be copper in primary form and inasmuch as the tariff entry for both copper billets and copper wire rods is the same i.e., unwrought copper, it cannot be said there was no declaration as such for the Respondents' product in question. We may observe that [in] the notification issued under Rule 57-A, the description of the input is given only by chapter heading and it was later that a proforma was prescribed for giving complete description of the goods. We, therefore, hold that the charge that the Respondents had not filed any proper declaration in respect of their goods cannot be sustained and the lower appellate authority's order therefore cannot be found fault with. The appeal of the Revenue is therefore dismissed.