1991 (9) TMI 202 - AT - Central Excise

Summary

Issues:
- Admissibility of MODVAT credit for runners & risers not specifically mentioned in the declaration under Rule 57G
- Interpretation of Rule 57G regarding the declaration of inputs for availing MODVAT credit

Analysis:

The case involved an appeal against the Collector of Central Excise (Appeals) Chandigarh's order regarding the admissibility of MODVAT credit for runners & risers not explicitly mentioned in the declaration under Rule 57G. M/s. Ganesh Steel Industries, engaged in manufacturing iron and steel products, received runners & risers but did not mention them in the declaration. The Assistant Collector disallowed the credit, but the appeal to the Collector (Appeals) was allowed, stating that runners & risers were covered by the relevant tariff heading. The Revenue argued that the declaration must specifically mention inputs, citing Rule 57G and a previous Tribunal decision in Paro Food Products v. CCE. On the other hand, the respondents contended that the runners & risers should be covered under the declaration as they were related to the declared ingots. They referenced decisions in Madras Fabricators v. CCE and CCE, Bombay v. Goodlass Nerolac Paints to support their argument.

The Member (T) analyzed the case, focusing on whether the omission of mentioning runners & risers in the declaration under Rule 57G was a procedural lapse or a bar to availing MODVAT credit. Referring to previous Tribunal decisions in Paro Food Products and Usha Marin Industries Ltd., it was established that a manufacturer must specify inputs in the declaration to claim credit. The Member (T) rejected the argument that the mentioning of the relevant tariff heading was sufficient, emphasizing the importance of a detailed declaration. The Tribunal's decision in CCE, Bombay v. Goodlass Nerolac Paints was distinguished based on the specific facts of the case. Ultimately, the appeal was allowed, affirming the necessity of a comprehensive declaration under Rule 57G for availing MODVAT credit, as per established legal precedents.

This judgment clarifies the stringent requirement of Rule 57G for manufacturers to specify inputs in their declaration to claim MODVAT credit, emphasizing the importance of accurate and detailed declarations. The case highlights that a mere mention of the relevant tariff heading is not sufficient, and any omission in the declaration can lead to the disallowance of credit. The decision reinforces the principle that procedural compliance is crucial in availing tax benefits under the MODVAT Scheme, as established through various Tribunal precedents and legal interpretations.