Customs, Excise and Gold Tribunal - Tamil Nadu
Collector Of Central Excise vs Ramakrishna Steel Industries on 17 December, 1990
Equivalent citations: 1991(56)ELT456(TRI-CHENNAI)
ORDER V.P. Gulati, Member (T)
1. This appeal is filed by the Collector of Central Excise, Coimbatore against the order of the Collector of Central Excise (Appeals), Madras. The short point that falls for consideration is whether the learned Collector (Appeals) has correctly allowed the MODVAT Credit in respect of Molybdenum wire scrap when the Respondents declared the input as "Molybdenum". The Collector (Appeals) has held as under :
"Molybdenum scrap or wire scrap would be covered by the declaration, Molybdenum as contended by the appellants. The mention of wrong chapter or tariff heading will not vitiate the declaration and also there being no doubt about the duty paying nature of the Molybdenum, the reversal of disallowance of inputs credit is not correct when the heading is covered under Notification issued under Rule 57A of Central Excise Rules".
2. Shri P. Sundararaju, the learned SDR for the Department pleaded that the declaration filed by the Respondents was for Molybdenum as their input while they had taken the credit in respect of Molybdenum scrap. He has pleaded that the description of the goods as given in their declaration would not cover the input Molybdenum scrap and covers only metal as such only. He however concedes that both Molybdenum scrap or wire and Molybdenum fall under the same Chapter 81 and is covered by the description. He drew our attention to the relevant grounds of appeal which for convenience of reference is reproduced below:
"The Collector (Appeals) contention is not correct for the following reasons. The benefit under Rule 57A cannot be simply allowed for the inputs because they are covered under Notification 177/86-C.E., dated 1-3-86 as amended. As per Rule 57-G, the manufacturer must specify the inputs intended to be used in the manufacture of the final product. Therefore, the MOD VAT credit cannot be given for the inputs which are not specifically declared with description and chapter heading by the manufacturer".
3. We observe that it is an admitted position that both Molybdenum scrap or waste and Molybdenum are covered under Chapter 81 which is the specified input under Notification 177/86-C.E. issued under Rule 57A of the MODVAT Rules. Tariff Heading 8102 reads as under :
"Molybdenum and articles thereof, including waste and scrap".
4. We observe that the description of the goods under Notification 177/86 is Chapter-heading-wise and there is no averment that in the present case the appellant did not declare the relevant chapter heading of the input. The essential requirement of the Notification, therefore, can be said to have been complied with by the Respondent inasmuch as the Respondents had correctly mentioned the Chapter heading. We observe that the Departmental authorities have also issued instructions in regard to the discrepancy that may be there in the declaration filed when the goods are received as input. Clarification issued by the Board in their letter F.No. 263/17/87-CX dated 9-2-88 is extracted below:
"The trade had expressed difficulty in furnishing the description of all the inputs on which they wish to avail MODVAT, as at times, the list thereof may run into thousands for a single final product only. They have therefore, represented that for the purpose of Rules 57(G), they may be allowed to give only the Chapter heading and a detailed description of the inputs and the finished products may not be insisted upon.
The matter has been examined by the Board and it has been decided that the declaration of the description and sub-headings for both the inputs and final product is essential for availing MODVAT Credit. Therefore this requirement cannot be dispensed with. However, the past case may be decided by the Collectors on merits keeping in view the fact that if the private/statutory records maintained by the assessee show that inputs have been received and used in the manufacture of the final products and declaration giving broad descriptions/chapters have been filed as required under Rule 57G, then the credit should not be disallowed".
5. It is thus seen that even according to the Departmental instructions so long as the description and the sub-heading for the inputs as also the final product is there, the benefit of MODVAT Credit can be allowed if it is established that the inputs received have been used in the manufacture of the final product. It is not the case of the Revenue that the inputs in question have not been used in the manufacture of the final product. In our view, the description "Molybdenum" given in the declaration with chapter heading by the Respondent is adequate enough for the purpose of compliance with the requirement of Rule 57A read with Rule 57(G). In this view of the matter, we, therefore, hold that the Collector (Appeal)'s order is maintainable in law and the appeal filed by the Revenue is rejected.