Customs, Excise and Gold Tribunal - Delhi
Rama Cables And Wires Ltd. vs Collector Of Central Excise on 22 July, 1993
Equivalent citations: 1993(68)ELT256(TRI-DEL)
ORDER
S.K. Bhatnagar, Vice President
1. These are appeals against the order of Collector (Appeals), New Delhi.
2. The learned Counsel has stated that the main issue relates to interpretation of MODVAT Rule 57F (3) which provides, inter alia, that the credit could be allowed in respect of any inputs utilised in the manufacture of any of the final products.
3. The appellants stated that for the purpose of manufacturing Aluminium Copper Winding Wire and conductors, the essential raw materials which are required are: aluminium wire rods, strips and flats and wires and also copper wire bars, rods, strips and flats. It is stated and submitted that in accordance with the provisions of Rule 57A of the Central Excise Rules, 1944 (hereinafter referred to as the said rules) and the relevant Notifications issued thereunder, the appellant is entitled to take credit on account of duties of excise paid on the said items of aluminium and copper and utilise such credit towards the payments of duties of excise leviable on the final products manufactured by the Appellant, namely aluminium/copper winding wires and conductors.
4. The appellants, on or about 4-4-1989 had made the declaration under Rule 57G of the Rules in which it was declared that aluminium/copper winding wire and conductors, all falling under Heading No. 85.44 would be the final product of the appellant and inputs in respect of the said final product would be various items of aluminium and copper mentioned in the said declaration.
5. Further the provisions of Rule 57F(3) clearly states that the credit taken in respect of any input can be utilised towards payment of duty of excise on any of the final products mentioned in the Declaration filed under Rule 57G. In the present case items of Aluminium and Copper and inputs in respect of the manufacture of the final products of copper and aluminium falling under the same sub-heading namely 85.44 of the Tariff. In the circumstances credit taken in respect of the items of aluminium can be utilised towards payment of duty of excise on the final products of aluminium or copper. The aforesaid interpretation of Rule 57F(3) has been accepted by the Honble Appellate Tribunal in the decisions reported in 1989 (41) E.L.T. 181 and 1989 (4) 126.
6. The learned Counsel further stated that in view of the subsequent orders passed by the Assistant Collector, the present appeal is now confined to the issue regarding correct interpretation of the Rules and no consequential relief in the form of amount mentioned would be required to be granted. The learned D.R. reiterated Department's viewpoint and emphasized that under MODVAT scheme specified inputs are required to be declared with reference to specified outputs. Therefore, the benefit could be availed of only with reference to the above position. Hence the impugned orders were required to be upheld.
7. The learned Counsel drew attention to Departmental clarifications based on M.F.D.R. Letter No. 261/72/16/87-CX.8, dated 8-8-1988, the relevant portion of which is reproduced below:
"The matter has been examined by the Board. It is observed that what Rule 57F (3) basically provides is that the credit of duty allowed in respect of any inputs may be utilised towards payment of duty on any of the final products in or in relation to the manufacature of which such inputs are intended to be used. This rule does not debar utilisation of excess (accumulated because of less duty on final products than on the inputs) for payment of duty on the same final products which are manufactured by non-duty paid inputs whether procured under Chapter X procedure or otherwise exempt under any Notification. Moreover there is no one to one correlation of inputs and final product under the MODVAT scheme for utilisation of credit. It has, therefore, been decided by the Board that the excess credit accumulated if any can be utilised towards payment of duty on the same end products even if manufactured out of non-duty paid inputs."
8. We observe that the learned Advocate's contentions have strong force. Rule 57F (3) states, inter alia, that "credit of a specified duty allowed in respect of any inputs may be utilised towards payment of duty of excise - (i) on any of the final products in or in relation to the manufacture of which such inputs are intended to be used in accordance with the declaration filed under sub-rule (1) of Rule 57G". Proviso to this sub-rule, while referring to the credit of duty on inputs used in products cleared for export under bond etc. allows utilisation thereof in.respect of similar final products cleared for home consumption. Therefore, the concept of similar final products is built in and the words any inputs and any of the final products used in 3(1) could be interpreted to mean relating to any of the final products of the same broad class or category as may have been declared in Rule 57G particularly as there is no one to one correlation provided for.
9. In the instant case, since both the inputs and outputs have been declared and the duty paid on inputs has been utilised with reference to same broad class of final products, the appellants arguments are acceptable. The appeals are accordingly accepted.