2005 (9) TMI 565 - AT - Central Excise

Summary

Issues:
- Disallowance of credit of Rs. 31,543
- Imposition of penalty

Analysis:
The appellant, a unit of State Electricity Board, engaged in manufacturing various articles under the Modvat Scheme, filed an appeal against the order disallowing credit of Rs. 31,543 and imposing a penalty. The dispute arose when the appellant received aluminium strips from Hindalco Industries but the invoices described the goods as extrusion bars and rods. The appellant contended that despite ordering aluminium strips, the invoices mentioned extrusion bars and rods. The appellant argued that they had filed a declaration and placed an order for aluminium strips, complying with Rule 57G. The Revenue, however, maintained that since the goods were described as extrusion bars and rods in the invoices, the credit was not allowable.

In the detailed analysis, it was found that the appellant had indeed ordered aluminium strips of a specific size from Hindalco Industries, and the same size and quantity were supplied. Although the invoices mentioned extrusion bars and rods, the appellant consistently referred to the goods as aluminium strips in their communications. Citing a precedent from the Larger Bench of the Tribunal, it was noted that the amendment to Rule 57G applied to pending cases as well. This amendment stated that credit cannot be denied if the declaration does not contain all required details. In this case, the appellant had filed a declaration for aluminium strips, and the Revenue did not dispute the size of the goods received. As there was no discrepancy in the size of the goods and the appellant had complied with the declaration requirements, the demand was deemed unsustainable, and the appeal was allowed, setting aside the disallowance of credit and penalty.

In conclusion, the judgment favored the appellant, emphasizing the importance of compliance with declaration requirements and recognizing the appellant's consistent communication regarding the goods received. The Tribunal's decision highlighted the applicability of rule amendments to pending cases and upheld the appellant's right to credit based on the substance of the transaction rather than mere technical discrepancies in documentation.