1998 (2) TMI 260 - AT - Central Excise

Summary

Issues:
Modvat credit denial for incorrect input declaration under Central Excise Rules, 1944.

Detailed Analysis:
The appellant appealed against the denial of Modvat credit amounting to Rs. 79,835 for C.R. Coils/Strips under sub-heading 7209.30 due to incorrect input declaration. The appellant argued that they had declared 33 items as inputs, including iron strips under Chapter No. 72 sub-heading 72.11, which was similar to the disputed sub-heading. They relied on Notification No. 177/86 which required only Chapter heading for input description. The appellant cited precedents where minor discrepancies did not warrant credit denial (CCE v. Ramakrishna Steel Industries and Bihar Caustic & Chemical Ltd. v. Collector of Central Excise, Patna).

The respondent contended that the appellant failed to declare C.R. Coils falling under sub-heading 72.09 as inputs, as required by Rule 57G of the Central Excise Rules, 1944. The respondent argued that without the correct declaration, Modvat credit was not permissible.

After hearing both parties, the Tribunal noted that the appellant had correctly declared iron strips under Chapter No. 72 sub-heading 72.11 as inputs, even though the disputed C.R. Coils fell under sub-heading 72.09. Referring to previous judgments, the Tribunal emphasized that compliance with Chapter Heading in the declaration sufficed for Modvat credit eligibility. The Tribunal held that as long as the inputs were used in the final product, minor variations did not justify credit denial (CCE v. Shri Ramakrishna Steel Industries and Bihar Caustic & Chemical Ltd. v. Collector of Central Excise, Patna).

Consequently, since the appellant had declared the correct Chapter Heading for the inputs and there was no dispute regarding the usage of the input in the final product, the Tribunal set aside the order denying Modvat credit and allowed the appeal.