1996 (7) TMI 262 - AT - Central Excise

Summary

Issues:
- Discrepancy between Modvat declaration and actual item received
- Eligibility of Modvat credit
- Interpretation of description for Modvat purposes

Analysis:
The appeal was filed against the order of the Commissioner of Central Excise (Appeals) regarding the denial of Modvat credit due to a discrepancy in the description of the imported item. The appellants, manufacturers of machinery for paper making, had declared 'Wire Cloth for Cylinder Mould' as an input in their Modvat declaration. However, the foreign supplier sent 'Bottom Synthetic Shrink Sleeves' instead, described under a different name in the invoice and bill of entry.

The main contention was whether the difference in the description of the item received compared to the one declared should affect the eligibility for Modvat credit. The appellants argued that despite the discrepancy, the item received was technically the same as the declared one, just made from a different material due to technological advancements. They provided evidence that the item received was commonly known as 'wire cloth for cylinder mould' in the market.

The Tribunal noted that both the declared item and the received item were covered under the Modvat scheme, and there was no dispute that the item was used as an input in the manufacturing process. The Tribunal emphasized that the description in the declaration should be sufficient for the intended purpose, as seen in previous Tribunal orders. The principle followed was that substantive compliance with the provisions was crucial.

Referring to precedent cases, the Tribunal highlighted that minor discrepancies in the description should not disqualify the item from Modvat credit eligibility. The Tribunal cited cases where similar discrepancies were allowed as long as the items were essentially the same and used for the intended purpose. Therefore, the Tribunal set aside the impugned order and accepted the appeal, ruling in favor of the appellants.