1992 (7) TMI 149 - AT - Central Excise

Summary

Issues:
1. Admissibility of modvat credit for inputs not declared in the modvat declaration.
2. Interpretation of the description "high tensile wire" in the modvat declaration.
3. Time bar for raising the demand.

Admissibility of modvat credit for undeclared inputs:
The appellants, manufacturers of cement concrete sleepers, availed modvat credit for various inputs but were issued a show cause notice for not declaring inputs like black steel and stranded wire. The Collector confirmed the demand for modvat credit taken for stranded wire not covered by the declaration. The appellants argued that high tensile wire description covers all high tensile wires, including stranded wire and black steel wire. The Department contended that stranded wire falls under a different chapter heading and should have been specifically declared. The Tribunal held that stranded wire is distinct and should have been declared separately, but black steel wire falls under high tensile wire description.

Interpretation of the description "high tensile wire":
The appellants argued that high tensile wire description includes stranded wire and black steel wire due to their high tensile nature. The Department disagreed, stating that stranded wire falls under a different chapter heading and should have been declared separately. The Tribunal agreed that stranded wire should have been specifically declared but allowed the benefit of declaration for black steel wire as it falls under high tensile wire description.

Time bar for raising the demand:
Regarding the time bar issue, the appellants believed that the high tensile steel wire description covered stranded wire and black steel wire, leading to a misconception in the declaration. The Tribunal found that the Department was aware of the receipt of stranded wires through gate passes submitted with returns, indicating no intention to evade duty. As the gate passes were available for scrutiny, any discrepancy should have been noticed earlier, and the demand should have been raised within the normal time limit. Thus, the appeal was allowed on the ground of time bar, and the order was set aside.