1989 (6) TMI 221 - AT - Central Excise

Summary

Issues:
- Appeal against the order of Collector of Central Excise (Appeals), Madras regarding MODVAT credit for lacquered sheets.
- Availing credit for duty on plain tin sheets without following proper procedure under Rule 57F.
- Delay in filing RG. 23A extracts with RT. 12 returns.
- Dispute over entitlement to MODVAT concession for lacquered sheets.

Analysis:
The judgment pertains to an appeal against the order of the Collector of Central Excise (Appeals), Madras concerning the availing of MODVAT credit for lacquered sheets. The appellants had filed a declaration under Rule 57A to claim MODVAT credit for lacquered sheets used in manufacturing metal containers falling under Chapter 83 of the Central Excise Tariff. However, issues arose as the duty on the plain tin sheets was not paid, and the appellants took credit for duty amounting to Rs. 2,28,521.64 without following the proper procedure under Rule 57F(2). The lower authorities held that the appellants had taken credit on undeclared items and did not follow the required procedures, leading to the denial of MODVAT benefits.

The learned Consultant for the appellants argued that the non-compliance with Rule 57F was a technical lapse due to the transportation process of the plain sheets for lacquering. He emphasized submitting a statement for correlating inputs with duty payment documents, which was not considered by the lower authorities. The consultant contended that the delay in filing RG-23 extracts should not result in denying the concessions under the Rules. The issue was whether the appellants were entitled to MODVAT concession for the lacquered sheets, considering the duty paid on the plain sheets, which was not disputed.

The Tribunal observed that the lower authorities focused on availing credit for plain sheets, which were not declared items, and not on the lacquered sheets for which a declaration was filed. The key consideration was whether the duty paid on the plain sheets reflected the duty paid on the lacquered sheets. As no further duty was charged on lacquering, the duty paid on the plain sheets should cover the lacquered sheets. The Tribunal directed a fresh examination of the matter to correlate the duty paid on plain sheets with the lacquered sheets. The order of the lower authority was set aside, and the case was remanded for a fresh decision, allowing the appellants to substantiate their claim with documentary evidence. The appeal was allowed by remand, emphasizing the need to establish the correlation between duty paid on plain sheets and lacquered sheets for availing MODVAT credit correctly.