1994 (12) TMI 185 - AT - Central Excise

Summary

Issues: Rectification of Mistake in Final Order

Issue 1: Rectification of Mistake in Final Order
The case involves an application for Rectification of Mistake in the Final Order by M/s. Kreyan Precision Machines. The Tribunal had dismissed the appeal based on an incorrect understanding of the inputs declared against the final products. The applicant argued that the inputs were specified separately from the final products in the declaration submitted, following a standard practice. The Tribunal wrongly concluded that the declared inputs did not match the desired modvat credit items. The applicant sought a recall of the order.

Analysis:
The advocate for the applicant contended that the inputs and final products were clearly listed separately in the declaration submitted by the applicant. The practice of indicating all final products and their corresponding inputs separately was consistent and had been accepted by the department for modvat credit purposes. The Tribunal's interpretation of the declaration was challenged as erroneous, as the inputs for spares of hydro-mechanical governing units were distinct from what was concluded by the Tribunal. The mistake in the order was attributed to a misinterpretation of the declaration under Rule 57G.

Issue 2: Interpretation of Declaration under Rule 57G
Upon scrutiny of the declaration filed under Rule 57G, the Tribunal found a discrepancy in the understanding of inputs for hydro-mechanical governing units and their spares. While the items were listed alongside the final product, a closer examination revealed that the inputs were separately categorized as castings, forgings, bars, extensions, ball and rubber bearings, and other items. The Tribunal observed that a direct correlation between specific inputs and final products was not explicitly indicated in the declaration.

Analysis:
The Tribunal acknowledged that the declaration under Rule 57G did not explicitly specify which inputs were utilized for each final product. Despite this lack of direct correlation, all inputs were detailed under the 'Inputs' column, and final products were listed separately. The Tribunal concluded that the absence of a clear indication of which input corresponded to which final product did not invalidate the declaration under Rule 57G. Therefore, the denial of modvat credit based on this discrepancy was deemed incorrect.

Outcome:
In light of the above analysis, the Tribunal recalled the Final Order and allowed the appeal, determining that the modvat credit had been wrongly denied. The decision was based on the understanding that while the direct correlation between inputs and final products was not explicitly stated in the declaration, the separate listing of all inputs and final products was in compliance with the requirements under Rule 57G, warranting the grant of modvat credit.