Customs, Excise and Gold Tribunal - Tamil Nadu
Kerala State Electronics Development ... vs Collector Of Central Excise on 20 December, 1989
Equivalent citations: 1991(32)ECC50
ORDER
S. Kalyanam, Member
1. This appeal is directed against the order of the Collector of Central Excise (Appeals), Madras dated 29th April, 1988 confirming the order of the Asst. Collector of Central Excise, Trivandrum dated 5.9.87 and directing the appellant to reverse the credit in respect of which the appellant has been found to have taken erroneous Modvat credit. The appellant is manufacturing sophisticated electronic items and had filed a declaration in terms of Rule 57-G of the Central Excise Rules, 1944 on 24.3.86 before the Department for taking Modvat credit in respect of the various inputs specified therein. Proceedings were instituted against the appellant by issue of a show cause notice by the Asst. Collector on 5.3.87 on an allegation that the inputs specified in the declaration were not in terms of Rule 57G and the proceedings ultimately resulted in an order holding that the appellant had availed erroneous Modvat credit without a proper declaration as per Rules and the order of the original authority in regard to the same was upheld by the lower appellate authority under the impugned order out of which the present appeal arises.
2. Shri Sashidharan, the learned Counsel for the appellant submitted that the appellant filed a declaration in terms of Rule 57G in respect of the inputs on 24.3.86 and subsequently filed a detailed and specific declaration in regard to the same inputs, as described by the Department, on 16.12.86. The appellant availed Modvat credit in respect of the duty suffered by the inputs on 18.12.86. It was urged that the authorities below denied the appellant the benefit of Modvat credit on the ground that the appellant had received the goods prior to the filing of the specific declaration dated 16.12.86 and so would not be covered by Rule 57G of the Central Excise Rules, 1944 for availing of Modvat credit. The learned Counsel contended that a proper construction of Rule 57G would bear out that receipt of inputs has nothing to do whatsoever with the filing of declaration and admittedly the appellant had availed of Modvat credit only on 18.12.86 after having filed a specific and detailed declaration in regard to the inputs on 16.12.86 itself and obtained a dated acknowledgment on 16.12.86. The learned Counsel, therefore, submitted that under the Scheme of Modvat if the inputs received by the appellant are covered by proper declaration though subsequent to the receipt of the inputs and the appellant had not taken any credit at all prior to the filing of the declaration, the appellant would be entitled to take Modvat credit notwithstanding the fact that the inputs had been received prior to the filing of the declaration. The learned counsel submitted that the appellant had actually taken credit in the R.G.23 Part II in respect of the inputs in question only on 18.12.86 that is, subsequent to the filing of the specific declaration. It was, therefore, submitted that the view taken by the authorities in denying the appellant the benefit of Modvat credit is not correct under law. The learned Counsel also placed reliance on the ratio of the ruling of the Bench of this Tribunal in the case of Clean Foods Corporation v. Collr. of C.Ex., Hyderabad Order No. 257/89 in E/Appeal No. 317/88 dated 22.5.89 - [1991] 31 ECC 323 (SRB).
3. Heard Shri K.M. Vadivelu, the learned D.R.
4. We have carefully considered the submissions made before us and the short question that arises for our consideration in the present appeal is whether in terms of Rule 57G the credit taken by the appellant in respect of the inputs in question is in order or not. It is not disputed that the appellant had filed a specific declaration in regard to the nature of the input received by the appellant and obtained a dated acknowledgment from the authorities in terms of Rule 57G on 16.12,86. It is only subsequent to the declaration of 16.12.86 the appellant has taken credit in RG23 Part II on 18.12.86. As a matter of fact the original authority in his order in this context has observed as under.--
since the inputs in this case have been received in the factory on 9.12.86 i.e., prior to the filing of the declaration dtd. 16.12.86, the Modvat credit availed is inadmissible. It has been pleaded by the assessee that the inputs for which credit was availed in RG 23A (Pt.II) on 18.12.86 have already been declared by them in their Modvat declaration dtd 24.3.86 and have furnished the details thereof as under:-....
The relevant provisions of Rule 57G read as under.--
Rule 57G. Procedure to be observed by the manufacturer:
(1) Every manufacturer intending to take credit of the duty paid on inputs under Rule 57A, shall file a declaration with the Asst. Collector of Central Excise having jurisdiction over his factory, indicating the description of the final products manufactured in his factory and the inputs intended to be used in each of the said final products and such other information as the said Asst. Collector may require, and obtain a dated acknowledgment of the said declaration.
(2) A manufacturer who has filed a declaration under Sub-rule (1) may, after obtaining the acknowledgment aforesaid, take credit of the duty paid on the inputs received by him:....
We do not find anything in Rule 57G to warrant a conclusion that the manufacturer would not be entitled to take Modvat credit if the inputs had been received prior to the filing of the declaration. Therefore, following the ratio of the Bench of the Tribunal cited by the learned Counsel and referred to above, we hold that inasmuch as the appellant had taken credit in the RG23A (Pt.II) only on 18.12.86 and had filed the relevant necessary declaration in terms of Rule 57G on 16.12.86 itself, we are of the view that the appellant would be entitled to take Modvat credit in respect of the inputs in question. But from the records we are not able to find that any verification was made by the authorities below with reference to the nature of the input and the credit taken and other relevant particulars and such facts will have to be verified by the original authority with reference to the various documents. Therefore, in the light of the principles we have enunciated above, we set aside the impugned order appealed against and remit the matter for reconsideration by the original authority.