Customs, Excise and Gold Tribunal - Delhi
Hawkins Cookers Ltd. vs Cce on 20 February, 1999
Equivalent citations: 1999(82)ECR665(TRI.-DELHI)
ORDER
S.K. Bhatnagar, Vice-President
1. This is an appeal filed against the order of the Commissioner (Appeals), Allahabad.
2. Learned Counsel for the appellants submitted that the appellants are engaged in the manufacture of pressure cookers and parts thereof, falling under Chapter sub-heading 7615.00 and 7418.00 in the factory at Satharia, Jaunpur (U.P.) w.e.f. February, 1990 and the same were exempted from payment of excise duty vide Notification No. 180/88 dated 13.5.1988 as amended. In the Union Budget presented to the Parliament on 28.2.1994, excise duty was imposed on pressure cookers w.e.f. 1.3.1994 vide Notification No. 41/94 dated 1.3.1994. Accordingly they filed necessary declaration under Rule 57(G) of Central Excise Rules, 1944 to avail the modvat credit of excise duty paid on inputs with the Assistant Collector of Central Excise on 11.3.1994.
3. He also submitted that some of the inputs received from the appellants' other factories situated at Thana (Maharashtra) and Hoshiarpur, Punjab were shown in the declaration as intermediate item. The appellant filed a revised declaration on 21.7.1994 showing the said intermediate item in appropriate column followed with a detailed note vide their letter No. 94-95/6428 dated 28.7.1994 and asked for condonation for procedural lapses, if any. On receipt of the said declaration, the Assistant Commissioner issued a show cause notice dated 22.9.1994 and asked them to show cause as to why the amount of duty claimed on inputs shown as intermediate items should not be recovered under Rule 571.
4. The appellants replied.
The appellants relied on various.Tribunal and High Court judgments that the credit should be allowed in view of their substantive compliance before claiming the same and the procedural lapses if any can be condoned.
6. The learned Assistant Commissioner without considering the case law rejected the appellants contention and confirmed the demand. The Collector of Central Excise (Appeals), Allahabad rejected the appeal and confirmed AC's order by concluding that the appellants have mentioned the items in the column of 'intermediate products' with reference to the declaration of some other inputs and not with reference to the inputs for which credit was taken.
7. Ld. Counsel emphasised that the ld. Commissioner (Appeals) has erred in saying that the declaration of 6 items as 'intermediate products' with reference to some other inputs cannot be taken as proper declaration under Rule 57G of Central Excise Rules.
8. He added that the appellants would like to draw the attention of the Bench to the decision of the Tribunal in the case of Kreyan Precision Machine - 1995 (76) ELT 110 wherein it has been held that 'declaration filed showing all final products in one column and all inputs in other column without indicating which inputs relate to a particular product' such declaration is appropriate if all inputs and all final products were duly declared. The appellants would like to state further that there is no 1:1 relation with regard to input and final product under Modvat Rules.
9. He also submitted that in the case of British Pharmaceutical Laboratories - 1994 (74) ELT 593 (J) : 1994 (55) ECR 92 (T), the Tribunal had held that non-mention of the goods specifically in a particular column of the declaration was a mere procedural irregularity. The Tribunal further held that the procedural infraction in not describing the intermediate product in the declaration under the relevant column does not disentitle the appellants from taking the credit.
10. Learned DR submitted that the appellants vide their letter dated 11.3.1994 filed a declaration under Rule 57G for inputs used in or in relation to the manufacture of pressure cookers. The declaration was subsequently amended/revised by them and other inputs included. The same were duly acknowledged by the office of the Assistant Collector. The appellants vide their letter dated 21.7.1994 received in jurisdictional division office on 25.7.1994 filed revised declaration declaring:
(1) Aluminium Pivot (7615.10) (2) Aluminium Cover Head (7615.10) (3) Vent Tube Washer (7615.10) (4) Vent Tube Nut . (7615.10) (5) Aluminium Rivet (7615.10) (6) Handle Bar Sheet Aluminium (7606.10) as inputs in or in relation to the manufacture of pressure cookers. Simultaneously appellants filed an application for condonation of delay under Rule 57G(5) for aforesaid inputs pleading novelty of modvat scheme for them as plea for delay in filing the declaration. Subsequently another letter was submitted in this context. Under Rule 57G(5) jurisdictional Assistant Collector has been empowered to condone delay in filing declarations. The appellants had, however, utilised the credit of duty in the intervening period on their own volition.
10. He also stated that the appellants have accepted that they had not declared the 6 items in their declaration as inputs mentioning them as intermediate products with reference to some other inputs cannot be taken as a proper declaration under Rule 57G. The decision in the case of British Physical Laboratories- , was with reference to the finished product declared as 'intermediate products' and not - with regard to a case where the inputs were not declared at all. Hence, the so-called declaration of the appellants under the column 'intermediate products' cannot be considered any declaration at all.
11. I have considered the above submissions. I have also perused the extract from the declaration filed by the appellants under Rule 57G in November, 1994, photocopies of which produced in the Court and not objected to or otherwise shown to be wrong by the Department's side. The appellants have also filed photocopies of the diagram, position and names of the parts in a typical pressure cookers of Hawkins Brand. The declaration shows the description of the final product as assembled pressure cookers of all class of models. It shows description and nature of the various types of inputs and the tariff classification. It has also a column for description and tariff classification of the intermediate product, if any. Ld. Counsel has in reply explained that the appellants Jaunpur Plant does not manufacture the items shown in column (4) of the declaration as intermediate product. These items were received by the plant from other Plants of the company. The other Plant of the company which manufacture them from the raw materials as per column (2) and (3) except rivets which are bought out items.
12. As such the items indicated in column (4) are not intermediate products for Jaunpur Plant. However, they are intermediate products in the process to manufacture of pressure cookers taken as a whole. They were mistakenly shown in this column by the Jaunpur Plant although in this plant they were required to be shown as inputs. This technical error or mistake happened because it was for the first time coming under Excise and they mechanically reproduced the declaration of the other Plants.
13. I also observe that there is a lot of force in the arguments of the learned Counsel for the appellants. The basic purpose of declaration is to let the Department know what are the inputs and outputs and the fact that some of the duty paid inputs which were received in the factory and used in the manufacture of final product were shown in column (4) instead of column (2) or (3) does not make much of a difference. After receiving the declaration, it was open to the department to make further enquiries and advise and guide the assessee suitably as a part of their normal administrative, executive and public relations duties. Furthermore, rectifiable errors or mistakes which are not of a substantial nature are condonable and are normally allowed to be rectified and this Tribunal has repeatedly held in a catena of orders that substantive benefit should not be denied on account of minor procedural infractions' if otherwise due on merits.
14. In view of the appellants' explanation, the ld. Collector (Appeals) should have allowed the appeal subject to verification, if any, necessary. Since this has not been done, the impugned order is set aside and the appeal is allowed subject to verification with consequential relief, if any, to the appellants in accordance with as already announced in the open Court.