1998 (9) TMI 236 - AT - Central Excise

Summary

Issues:
Benefit of Modvat credit in respect of Sodium Tri Poly Phosphate (STPP) used in the manufacture of detergent powder without filing a specific declaration under Rule 57G of the Central Excise Rules, 1944.

Detailed Analysis:

Issue 1: Modvat Credit Eligibility
The appellant, engaged in manufacturing detergent powder, exported the product to Russia during April to June 1989. Modvat credit on duty paid STPP was claimed without filing a specific declaration. The Asstt. Commissioner held that STPP received before 12-6-1989 was not eligible for Modvat credit. The Commissioner of Central Excise (Appeals) confirmed this view, emphasizing the substantive nature of the declaration requirement.

Issue 2: Appellant's Arguments
The appellant's counsel argued that STPP was used in manufacturing detergent powder, duly recorded in returns, and assessed by Central Excise Range Officers. It was contended that the failure to specifically declare STPP was a genuine mistake, rectified by filing a declaration on 12-6-1989. Citing precedents, it was argued that Modvat credit should not be denied solely based on non-declaration.

Issue 3: Revenue's Stand
The Revenue contended that filing a declaration before availing Modvat credit was essential for verification purposes. Referring to a previous case, it was argued that non-declaration of the final product was not condonable as it was a substantive requirement, not a procedural one.

Issue 4: Tribunal's Analysis
The Tribunal noted that STPP was a specified input used in manufacturing detergent powder, which was also a specified final product. The appellant had exported detergent powder to Russia and claimed a refund of credit for STPP. The Tribunal observed that STPP was duty paid, received under gate passes, and utilized in production, as evidenced in relevant documents.

Issue 5: Decision and Rationale
After considering all facts, the Tribunal disagreed with the Commissioner's view on Modvat credit for STPP. The order denying the credit was set aside, allowing the appeal with consequential benefits if permissible under the law. The Tribunal emphasized that the benefit of Modvat credit should not be denied solely due to non-filing of a declaration, especially when all other conditions were met.

This detailed analysis of the judgment highlights the key issues, arguments presented by both parties, the Tribunal's analysis, and the final decision rendered in favor of the appellant regarding the Modvat credit for STPP used in the manufacture of detergent powder.