1999 (1) TMI 215 - AT - Central Excise

Summary

Issues involved:
1. Whether Modvat can be claimed on undeclared inputs without a Modvat declaration as per Rule 57G(1) of CER, 1944.

Analysis:

Issue 1: Modvat claim on undeclared inputs without a Modvat declaration

The Tribunal, in this case, considered the question of law regarding the availability of Modvat credit on undeclared inputs without a Modvat declaration. The Tribunal noted that the dispute did not involve a situation where no declaration had been filed by the assessee. Instead, the issue revolved around a minor variation in the description of the declared input and the sub-heading, leading to the denial of Modvat credit. The Tribunal highlighted that the declaration filed by the assessee had been accepted and operated by the Department for six years before any discrepancies were raised. The Revenue argued for a reference to the High Court due to contradictory decisions on Modvat credit availability in cases where no declaration had been filed. However, the Advocate for the Respondent cited legal precedents, including the Supreme Court's decision in New Jehangir Vakil Mills Ltd. v. Commissioner of Income-tax, emphasizing that the question of law must arise from the Tribunal's order. The Tribunal agreed with the Respondent's position, emphasizing that the dispute was not about the absence of a declaration but rather a minor discrepancy. Referring to previous judgments and legal principles, the Tribunal concluded that minor variations in the declaration should not result in the denial of substantive benefits like Modvat credit. Therefore, the Tribunal rejected the Revenue's application for reference to the High Court, maintaining consistency with its previous decisions.

This judgment clarifies the legal position regarding Modvat claims on undeclared inputs and underscores the importance of specific legal questions for reference to the High Court. It highlights the significance of established legal principles in determining the eligibility for substantive benefits like Modvat credit, even in cases of minor discrepancies in declarations. The decision provides guidance on the interpretation and application of relevant provisions, ensuring consistency and adherence to legal principles in tax matters.