2001 (3) TMI 1039 - AT - Central Excise

Summary

Issues:
1. Modvat credit availed on photo polymer films and alumina ceramic substrates.
2. Correctness of declaration filed under Rule 57G.
3. Allegation of suppression of material facts and wrongly availing modvat credit.
4. Disallowance of a small credit of duty.

Modvat credit on photo polymer films and alumina ceramic substrates:
The appellants, engaged in manufacturing digital electronic exchange equipment, availed modvat credit on inputs, including photo polymer films and alumina ceramic substrates. The Central Excise authorities noted discrepancies in the declaration filed by the appellants regarding these items. The appellant's advocate argued that the items were declared under a different name but fell under the same classification. He cited a rule amendment exempting detailed descriptions in declarations. The advocate contended that the appellants were entitled to modvat credit based on the classification of the items.

Correctness of declaration under Rule 57G:
The advocate further argued that the declaration filed by the appellants correctly included alumina/ceramic substrates, and therefore, there was no mistake in their declaration. He emphasized that the items were covered by the same tariff item, making them eligible for modvat credit under the amended Rule 57G. On the contrary, the Respondent Commissioner contended that the rules must be strictly followed, and since the items were not accurately described in the declaration, the claim was rightfully rejected.

Allegation of suppression of material facts and wrongly availing modvat credit:
The issue of suppression of material facts and wrongly availing modvat credit was raised by the Respondent Commissioner. The Commissioner argued that the authorities correctly rejected the appellant's claim due to discrepancies in the declaration. However, the appellants pointed out a circular clarifying that minor procedural lapses should not lead to show cause notices without proper inquiry. The appellants also highlighted the settled position that reliance on statutory documents in show cause notices limits the invocation of a longer period.

Disallowance of a small credit of duty:
A small credit of duty was disallowed on the grounds of goods being short received and unused. The appellants had already debited a portion of the amount, and the remaining accounted amount was deemed admissible. The Tribunal found that both on merit and limitation grounds, the demand was not sustainable in law. Consequently, the impugned order was set aside, and the appeal was allowed.