1996 (2) TMI 268 - AT - Central Excise

Summary

Issues: Review of MODVAT Credit allowed by Assistant Collector, classification of CR Sheets and CR sheets in coil, applicability of Rule 57H for MODVAT credit.

Analysis:
1. The case involves a review of MODVAT Credit granted by the Assistant Collector to the appellants for duty amount of Rs. 19,127 in relation to CR Sheets in coils falling under Tariff sub-heading 7209.30.

2. The appellants, manufacturers of motor vehicles, declared CR sheets falling under Chapter sub-heading 7209.20 but received CR sheets in coil form falling under Chapter sub-heading 7209.30. They filed a revised declaration and availed MODVAT Credit in RG-23A Part II. The Department raised an objection, which was later allowed by the Assistant Collector through order no. 56/93 dated 28-6-1993.

3. The Revenue challenged the Assistant Collector's order, arguing that CR Sheets and CR sheets in coil are distinct under the Tariff, and as the appellants did not declare CR Sheets in coil form in their submission under Rule 57G, the MODVAT credit cannot be granted. Additionally, the Revenue contended that Rule 57H does not apply to the case as it pertains to transitional provisions.

4. After hearing both parties, the Tribunal found the Collector's decision unsustainable. The Tribunal noted that both CR Sheets and CR sheets in coil form are classifiable under Chapter 72 and declared inputs for MODVAT Credit under Notification No. 177/86. The appellants had promptly filed a revised declaration before availing the credit, which was in line with the procedure. The minor discrepancy in sub-heading did not negate their entitlement to MODVAT Credit.

5. Citing the case of Chamundi Steel Re-rolling Mills v. Collector of Central Excise, the Tribunal emphasized that MODVAT Credit should not be denied if procedures are followed and records maintained. In this case, the appellants adhered to all requirements, and the Assistant Collector rightfully granted them the benefit. Consequently, the Tribunal set aside the Collector's order and allowed the appeal.

In conclusion, the judgment focused on the correct classification of inputs, adherence to procedural requirements for MODVAT Credit, and the applicability of relevant rules. The Tribunal upheld the appellants' entitlement to the credit, emphasizing compliance with procedures over minor discrepancies in classification.