1994 (1) TMI 178 - AT - Central Excise

Summary

Issues:
1. Whether the appellant complied with the requirements of Rule 57G of the Central Excise Rules regarding the declaration of final products and inputs for availing modvat credit.
2. Whether the failure to declare bare aluminum wire of a specific thickness as a final product was a technical lapse or a substantive requirement.
3. Whether the orders of the Asstt. Collector and the Appellate Collector disallowing modvat credit of Rs. 60,389.58 should be set aside.

Analysis:
1. The appellant, M/s. P. G. Conductors, filed an appeal against the order of the Collector of Customs (Appeals) confirming the Asstt. Collector's decision to debit the credit of Rs. 60,389.58 for inputs used in the manufacture of undeclared final product - Bare Aluminium Wire of thickness 3.25 mm or more. The appellant failed to declare this product in their initial declaration under Rule 57G, leading to a Show Cause Notice being issued. The appellant argued that their ignorance of the modvat scheme and the lack of a prescribed proforma for declaration were reasons for the oversight. However, the Tribunal found that the requirement to file a declaration under Rule 57G was substantive, not procedural, and the failure to comply justified the Collector's decision.

2. The appellant's advocate argued that the failure to mention bare aluminum wire of a specific thickness in the declaration was a technical lapse, emphasizing that the department was aware of the inputs used in the finished products. However, the Tribunal noted that Rule 57G mandates manufacturers to file a declaration indicating final products and intended inputs, with a requirement for obtaining acknowledgment. The use of the term "shall file a declaration" in the rule indicated a substantive requirement, not merely a procedural formality. As the appellant did not fulfill this requirement, the Tribunal upheld the Collector's decision to debit the modvat credit.

3. The appellant contended that the orders disallowing modvat credit should be set aside, highlighting their lack of familiarity with the modvat scheme's formalities. The Tribunal acknowledged the appellant's explanation but emphasized the mandatory nature of Rule 57G's declaration filing requirement. Since the appellant failed to comply with this substantive rule, the Tribunal found no grounds to overturn the Collector's decision. Consequently, the appeal was rejected, affirming the sustainability of the impugned order and the Asstt. Collector's decision to debit the modvat credit amount.