Customs, Excise and Gold Tribunal - Tamil Nadu
Cce vs Universal Radiators Ltd. on 31 October, 2003
Equivalent citations: 2004(92)ECC147, 2004(176)ELT501(TRI-CHENNAI)
JUDGMENT
S.L. Peeran
1. Party's appeal alongwith stay application and Revenue's appeal on the same ground are taken up together for disposal as per law.
2. Since, on consideration of the arguments, it is seen that the stay application could be allowed and appeal could be taken with Revenue appeal, the stay application of assessee is allowed and their appeal alongwith appeal of Revenue are taken up. The issue being common, appeals are decided together.
3. Assessees are manufacturers of radiators falling under chapter heading 87.08. They had availed modvat credit on various inputs and have been filing necessary declaration. They availed modvat credit on lead and tin alloy falling under chapter sub-heading 7801.10. They had taken modvat credit without filing declaration with regard to lead tin alloy as required under Rule 57G of Central Excise Rules, 1944. Hence, in the Revenue's appeal vide show cause notice they were directed for recovery of amounts utilized by them. The original authority upheld the allegation in terms of show-cause notice while the Commissioner (Appeals) noted in his order that modvat credit cannot be denied in the light of judgment rendered by the Tribunal in the case of Mukesh Engg. Industries, 1996 (83) ELT 641 (T) as modvat declaration had been filed with regard to all the inputs utilized by them and held that where there is a nexus with the declared inputs in respect of non-declared one, if they are falling under same chapter and sub-heading, then modvat credit cannot be denied. He noted that lead and tin alloy fell under the same tariff heading and, therefore, their non-filing of declaration in respect of lead alloy did not violate the rule and applied the ratio. The findings recorded in para-3 are reproduced herein below:
4. I have given my careful consideration to the facts and circumstances of the case and the submissions made in the grounds of appeal and during the personal hearing. Lead-tin alloy is one of the inputs used in the manufacture of radiators for soldering purpose. Any metal Includes alloy also. Heading No. 7801.10 includes lead alloy also and the input lead-tin alloy received by them contains 70% lead and 30% of tin. In the case of Associated Plumbings, 1998 (98) ELT 269 (T) Bras scrap declared as copper scrap. An alloy of copper is required to be classified under the heading of copper in terms of Section Note 4 of Section XV of CET. Modvat credit not denied. The Tribunal in the case of Mukesh Engineering Industries, 1996 (83) ELT 641 (T) has ruled that where Modvat declaration filed but inputs in question not specifically declared inputs in question having nexus with declared inputs and also falling in chapter headings and sub-headings modvat benefit allowable. Modvat is denied on account of the fact that the 57G declaration did not contain lead and tin alloy. It is true that lead and tin had been declared. Tariff Classification included the alloy wherein lead predominates under Tariff Heading 7801,00. The declaration contains the purpose for which the alloy is used. Further they had declared that the inputs lead and tin are alloyed and used as input in further manufacture. So there is substantial compliance with the statutory requirement. The input under dispute is lead tin alloy in which lead predominates. This is classifiable under lead only as per Chapter notes. There is no infirmity in their declaration. So the Assistant Commissioner's contention that this cannot be applied for declaration under Rule 57G was not sustainable.
5. In the case of assessee's appeal, the benefit has been denied by the Commissioner (Appeals) on the same item and hence they are in appeal.
6. I have heard Ld. DR Shri C. Mani and Ld. Consultant Shri Y. Hasan Khan.
7. On careful consideration of the submissions, I notice that the main item Lead and Tin have been declared. It is stated by the Consultant that in the declaration they have mentioned that lead alloy will also be utilized and, therefore, there is no violation. He produces a copy of the declaration to support his contention. He submits that the order of the Commissioner (Appeals) is required to be sustained as it follows the judgment rendered by the Tribunal in the case noted by him in the order extracted above. Since the issue is covered, he seeks for allowing their appeal and dismissing Revenue's appeal.
8. Ld. DR reiterated departmental contention. He submitted that filing of declaration is a basic requirement for grant of modvat credit under Rule 57G and as the same has not been done, therefore, the order passed by the Commissioner in the assessee's appeal is required to be confirmed and the order passed in Revenue's appeal is required to be set aside.
9. On a careful consideration of the submissions, I notice from the records filed by the assessees that they have declared the item lead and tin and have also mentioned that lead alloy will also be utilized therein thereby a link between tin alloy alongwith lead and alloy has been established. Therefore, the Commissioner (Appeals) in Revenue's appeal has clearly analyzed the issue and applied the ratio of the Tribunal judgment noted in his order. From that point of view there is no merit in the revenue appeal and assessee's contention that lead alloy is a declared item as there was a mention about its utilization in the declaration is required to be accepted. Therefore, the Revenue's appeal is rejected and party's appeal is allowed. The stay application is also disposed of.