2001 (7) TMI 804 - AT - Central Excise

Summary

Issues: Disallowance of Modvat credit due to vague declaration under Rule 57T for capital goods.

Analysis:
1. The appellate tribunal addressed the issue of disallowance of Modvat credit to the appellants based on the contention that the declaration filed under Rule 57T for capital goods was vague and not specific. The original adjudicating authority had concluded that the declarations lacked specificity as they did not include details such as the name, brand name, and description of the capital goods. Some declarations only mentioned chapter headings with a general description of the goods as parts and accessories suitable for specific machines. The appellant's advocate highlighted Notification No. 7/99-C.E. (N.T.) and Circular No. 441/7/99-CX, emphasizing that the Assistant Commissioner should ensure duty payment on the capital goods and their actual or intended use in manufacturing final products before denying Modvat credit based on procedural grounds. Reference was made to a Larger Bench decision in a similar case, where the matter was remanded for reconsideration based on the mentioned notification.

2. The tribunal also considered the arguments presented by the Revenue, which contended that the declarations lacked specific details such as the name or brand name of the goods. However, it was noted that correct sub-headings were provided in most cases, even though detailed descriptions were missing, with goods being described as parts and accessories of particular machine headings. Considering the amendment introduced by Notification No. 7/99 and subsequent clarifications from the Board, the tribunal held that minor procedural irregularities should not be a basis for denying Modvat credit for capital goods, especially when there were no concerns regarding duty payment or utilization of the goods in the appellant's factory. Consequently, the tribunal set aside the previous order and allowed the appeal, granting consequential relief to the appellants.