1997 (10) TMI 207 - AT - Central Excise

Summary

Issues: Disallowance of Modvat credit due to insufficient declaration of inputs.

Analysis:
1. The appellants, manufacturers of Control panels and Rectifiers, were denied Modvat credit of Rs. 3,65,006.24 due to inadequate description of inputs in the declaration filed under Rule 57G of the Central Excise Rules, 1944. The dispute arose regarding the specific inputs like Miniature Circuit Breakers, Switches, and other items falling under different sub-headings.

2. A show cause notice was issued alleging non-specific declaration of certain inputs, leading to the reversal of credit availed on those items. The Assistant Collector and the Collector of Central Excise (Appeals) upheld the demand, emphasizing the need for a detailed declaration specifying the final product manufactured and the inputs used in the production process.

3. The appellant's advocate argued that the description of excisable goods in the declaration and annexures, along with relevant gate passes, was sufficient for the department to verify the receipt of inputs. It was contended that a general description of goods sufficed for extending credit, and the specific declaration provided by the appellants should not warrant credit denial.

4. The Departmental Representative reiterated the lower authorities' findings, emphasizing the lack of full particulars such as the name and type of inputs in the declaration as the reason for denying credit on certain items.

5. Upon review, the judge noted that the gate passes clearly indicated the receipt of Electrical switchgears, Fusegears, and MCB Distribution Boards by the appellants, falling under the Tariff headings enumerated in the 57G declaration. The dispute centered around the absence of specific details like type and rating of switchgears in the declaration. Relying on precedents like Collector of Central Excise v. Triton Valves Ltd. and Concord Control v. Collector of Central Excise, it was held that the appellants' declaration, though not perfect, was adequate to cover the disputed inputs. The judge ruled in favor of the appellants, setting aside the impugned order and allowing the appeal.