1996 (1) TMI 219 - AT - Central Excise

Summary

Issues:
Appeal against the order of Collector (Appeals) dated 22-1-1993 regarding Modvat benefit disallowance based on the vagueness of declaration description.

Detailed Analysis:
The appellants filed Modvat declarations on two separate occasions, following the prescribed procedure to avail of the Modvat benefit. Subsequently, a Show Cause-cum-Demand Notice was issued, demanding payment of a significant amount. The Assistant Collector dropped most of the demand but confirmed a smaller amount. The Department appealed this decision to the Collector (Appeals), who confirmed a part of the original demand, citing the vagueness of the inputs' description in the declaration as the reason for disallowance.

The appellants, not satisfied with the clarity of the Collector (Appeals) order, sought clarification from the authorities, which revealed a reduced demand amount. They provided detailed information about the items and amounts in question in their appeal memorandum and revised stay application. The appellants argued that they had indeed filed detailed declarations with specific descriptions of inputs, headings, and sub-headings, even if some items were listed as 'others' due to the large number of chemicals involved.

During the proceedings, it was acknowledged by the Department's representative that the appellants had provided adequate information in their declarations, as per the show cause notice and annexures. Both sides confirmed that there were no other disputes, and the Modvat credit was admissible, with the prescribed procedure duly followed.

The presiding judge observed that while specificity in declarations is essential, minor procedural infractions should not lead to the disallowance of substantive benefits. The judge emphasized that if further information was needed, the authorities could have directed the appellants accordingly or granted provisional approval pending additional details. Considering the correctness of the submissions from both sides and the legal precedent, the judge set aside the Collector (Appeals) order and accepted the appeal, allowing the Modvat benefit to the appellants.