Customs, Excise and Gold Tribunal - Tamil Nadu
Commissioner Of C. Ex. vs Narasus Spinning Mills on 23 October, 2000
Equivalent citations: 2001(127)ELT474(TRI-CHENNAI)
ORDER S.S. Sekhon, Member (T)
1. These four appeals have been filed by Revenue against an order of Commissioner (Appeals) who had allowed the credit on goods for which party had not made proper declaration under Rule 57T stating that non-filing of a declaration was not sufficient ground for denying the credit as Rule 57T clearly states that for taking credit, manufacturer shall file a declaration which was a mandatory condition. Respondents appeared to have filed consolidated declaration on 27-11-1995 in which it was alleged that they had failed to include the impugned goods specifically but had given a general description which was not sufficient as held in the case of Indian v. Hume Pipe Co. Ltd. -1995 (77) E.L.T. 885 (Tribunal). Further, Revenue contends in this appeal that allowing Modvat credit on air compressor, cables, electric switch boards and circuit breakers prior to the amendment of Rule 57Q w.e.f. 16-3-1995 was not permissible since air compressor and its parts were specified as capital goods only w.e.f. 16-3-1995 and prior to that date they were not eligible and Revenue has relied upon the decision in the case of Fourts (India) Laboratories Pvt. Ltd. -1997 (92) E.L.T. 281 (Tribunal) and submits that case of Jawahar Mills -1998 (100) E.L.T. 41 has been referred to the Larger Bench and prays that Commissioner (Appeals) order allowing Modvat credit may be set aside with consequential benefit restoring the order of Assistant Commissioner of Central Excise, Salem.
2. We have heard ld. DR Shri S. Kannan, who reiterates the submissions of original authority and submits that except for the Jawahar Mills case, which has been now settled by the Larger Bench, the grounds taken in appeal would be justified and appeal to be granted in favour of Revenue as prayer for.
3. Shri B. Gopalan, ld. Consultant for the respondents submits that they had filed the declaration as it is an admitted fact in appellant's appeal itself that a declaration was filed. The only allegation is that declaration is not covering certain goods. It is nobody's case that this is a case of non-filing of declaration as has been alleged herein. The declaration filed by them under Rule 57T would be covering the subject goods and the order of Commissioner should be upheld and the order of AC is not correct on facts inasmuch as a declaration has been filed by them.
4. As regards eligibility on the goods which have been included under Rule 57Q after the amendment on 16-3-1995, he submits that the Larger Bench decision in the case Jawahar Mills reported in 1998 (108) E.L.T. 47 is in their favour and they are eligible for credit on these items relying upon the abovesaid decision.
5. We have considered the submissions and find that the Jawahar Mills decision of the Larger Bench -1999 (108) E.L.T. 47 has considered cables, electric switch boards, air circuit breakers, air compressors etc., to be capital goods. We do not find any infringement on the part of Commissioner (Appeals) coming to a decision that subject goods serve an important usage in connecting electricity to the machines to the transformer yard as a whole and each and every machine from the designated panels and switch boards are accessories of such capital goods and electricity can pass on only when switch were used and air circuit breakers were accessories. Therefore, they were eligible for the benefit of Modvat credit as arrived at by the ld. Commissioner (Appeals). We, therefore, find no reason to deny credit on these items as capital goods.
6. As regards the submission of ld. Consultant we have examined a copy of the declaration filed by the respondents under Rule 57T(1), dated 27-11-1995 received by AC's office on 28-11-1995 wherein spares falling under 8481.99, 8419.00, 8448.90 and shaft and compressors and their spares under 8501.90 have been declared along with their said goods. From the paper book filed, we find that there is no details available as to what were the goods covered by the alleged documents which were received without filing the detailed declaration. However, ld. DR fairly conceded after inspecting the said declaration copy, as indicated by the ld. Consultant, to have covered the subject goods which were held to be not declared in detail. He submits that even though tariff sub-heading under the CET have been declared, the brand name, and the name of the actual item has not been clearly designated and declaration the said declaration which was required to be done. We cannot accept this submission on the part of Revenue if appellant had declared the tariff headings, as understood and known by him he could have been asked the details and the benefit of Modvat credit could not have been denied merely because he has not named the brand name and the details of machinery parts which were covered under the said sub-heading. Since appellant is a manufacturer of cotton yarn and would be familiar with the subject goods to be only as parts of his machine and would be dealing with them as such and has from the inspection declaration is found to be declaring them as parts of said machine, which the Commissioner (Appeals) has also found in his order to be parts and accessories of the capital goods of the respondents manufacturer in this case. Therefore, we do not find any case or cause to deny the benefit of Modvat credit on capital goods in the facts of this case.
7. In view of our findings, we reject the Revenue's appeals and confirm the order of the Commissioner (Appeals). Ordered accordingly.