1993 (8) TMI 208 - AT - Central Excise

Summary

Issues:
Interpretation of modvat credit eligibility based on declaration description and actual goods received.

Analysis:
The appeal was against the order passed by the Collector of Central Excise (Appeals), Pune, regarding the eligibility of modvat credit for certain inputs received by the appellants. The appellants had declared aluminium slugs, coating paints, and printing inks for modvat credit. However, they received inputs described differently under specific Gate Passes, leading to the Department objecting to the credits due to lack of matching declarations. The Assistant Collector's adjudication order was upheld by the Collector (Appeals), prompting the appeal to the Tribunal.

During the proceedings, the appellant's advocate argued that the received inputs were covered by the declaration despite the discrepancies. He contended that the received items, such as met track additive and R.C. Reducer, were essential for the processes mentioned in the declaration, even if not explicitly named. He also clarified that the supplier had mistakenly labeled the aluminium blanks as such, while they were actually aluminium slugs, both falling under the same Chapter Heading and serving the same purpose in manufacturing aluminium tubes.

On the other hand, the Department's representative emphasized the importance of the description in the modvat declaration, stating that if the goods did not match the declaration, modvat credit could not be availed. Citing previous tribunal decisions, he argued that the received inputs, like met track additive and R.C. Reducer, did not align with the declaration descriptions, making them ineligible for credit. He highlighted the classification variances between the declared items and the received inputs.

After considering both sides, the Tribunal found that while the met track additive and R.C. Reducer did not directly match the declaration descriptions, they were essential additives for the declared processes and thus not eligible for modvat credit. However, in the case of the aluminium blanks, despite the labeling discrepancy, they were deemed eligible for credit as they were recognized raw materials for the intended manufacturing process, supported by a clarification from the supplier. The Tribunal partially allowed the appeal, ordering the restoration of modvat credit for the aluminium blanks received under a specific Gate Pass.