1996 (12) TMI 227 - AT - Central Excise

Summary

Issues:
1. Interpretation of Rule 57G declaration for Modvat facility.
2. Validity of multiple endorsements on challans issued by SAIL.

Interpretation of Rule 57G declaration for Modvat facility:
The case involved the respondents, engaged in manufacturing iron and steel products, who availed of Modvat facility for certain inputs, including CI Skull scrap. The department objected that the declaration filed did not specifically cover CI Skull scrap, only mentioning "scrap." The Assistant Collector disallowed Modvat credit, but the Collector of Central Excise, Chandigarh set aside this decision, leading to the appeal. The learned DR argued that a specific description under Rule 57G was essential and not complied with. In contrast, the advocate for the respondents contended that their declaration of steel scrap covered CI steel skull scrap obtained from SAIL depot. The Tribunal held that the description of "scrap" in the declaration encompassed CI skull scrap, as scrap types vary depending on the source. The Collector (Appeals) decision was upheld, emphasizing the nature of scrap and the source from which it was obtained.

Validity of multiple endorsements on challans issued by SAIL:
The second issue revolved around the validity of multiple endorsements on challans issued by SAIL. The learned DR argued that multiple endorsements rendered the challans invalid as duty paying documents under Rule 57G. However, the advocate for the respondents pointed out that the department allowed endorsements on gate passes, and since SAIL's challans were equivalent to gate passes, they should be treated similarly. The Tribunal upheld the Collector (Appeals) decision, citing a previous case where more than two endorsements on gate passes did not invalidate Modvat credit. The Tribunal found that the duty paid character and amount were established from the SAIL challans, distinct from gate passes, and upheld the decision not to interfere with the findings of the Collector (Appeals). Consequently, the impugned order was upheld, and the appeal was dismissed.