9911796707
TMI Blog1993 (10) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... was alleged in the said Notice that they had used HTS Wire and cement (which were their declared inputs for their final products, concrete Railway Sleepers) in the manufacture of batons for which they had not submitted the required declaration. An amount of Rs. 3,66,612.30 had been availed as Modvat Credit on such inputs which was alleged to be not admissible to them. They were directed to show cause as to why the said amount may not be demanded from them under Rule 57-1 of the Central Excise Rules read with Section 11A of the Central Excises and Salt Act, 1944. 2. In the impugned order. Collector of Central Excise, Patna has observed that the declaration filed by them on 26-3-1987 was typewritten and some words had been inserted by hand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs of the Collector. They have contended that the Collector s findings about the insertion of handwritten words in the declaration is baseless as nothing was done to verify its correctness with the original copy available with the Assistant Collector of Central Excise, Gaya. The adverse findings about the inclusion of concrete batons in the declaration dated 26-3-1987 when the minutes of the production schedule meeting on 23-9-1987 suggested about the use of RCC batons had been reached without giving them an opportunity to clarify the position. They are manufacturing PSC Sleepers for supply to the Railways since 1983 and they had already decided to replace the wooden batons by RCC batons in early 1987 to save wood. While submitting the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had been typewritten. This cannot be taken to mean that the additional entry had not been made before submitting the form to the Assistant Collector s Office. The form had been submitted to the department and is in their custody. No case has been made out that the addition was made in the form in a fraudulent manner after its submission to the Office. There is no such charge nor can there be one. As explained in the Appeal, though the matter of using concrete batons for holding the concrete sleepers was discussed in the meeting of the Railways with the suppliers of concrete sleepers held in September, 1987, the appellants who had been manufacturing sleepers since 1983 had themselves suggested the use of concrete batons and hence, declared t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correspondingly. Actually there is no revenue loss. Instead of paying duty separately on the batons, they have paid the same rate of duty on its value, which has been included in the value of their final product, PSC Sleepers . 10. Shri Biswas pleaded in conclusion that their appeal be allowed and consequential relief granted to them as they have paid the amount of the disputed duty amount in pursuance of the order passed by the Bench rejecting their stay application. 11. Shri N.K. Mondal, learned Departmental Representative replied to the arguments advanced by Shri Biswas. He adopted the reasoning contained in the Collector s order. He pleaded that the appeal be dismissed. 12. We have considered the rival submissions. We have peruse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. 13. The contention of the appellants that they had filed the required declaration in March, 1987 after Modvat credit facility was extended to their products from 1st March, 1987 and the demand of duty from 1-3-1986 is not proper, is valid to that extent. But the appellants have a stronger case in regard to their submission about the time-barred nature of the notice and the revenue neutral position because of the inclusion of the cost of the batons in the assessable value of their final product, namely, PSC Sleepers. 14. The Collector has noted in his order that wrong availment of Modvat Credit is the main issue. He has stated that the appellants plea was that they were using the batons as packing material. They were not taking credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the Madras High Court in Ponds (India) Ltd. v. Collector of Central Excise reported in 1993 (63) E.L.T. 3 treating such granules as inputs for their final product themselves. The Honourable High Court did not agree with the interpretation of the Board given below : Rule 57A allows Modvat credit for packing materials and not on raw materials for making such packaging materials. Packaging materials are ready to use articles such as containers, boxes, cartons, bottles etc. Therefore, modvat credit will be admissible for the duty paid on such ready to use packaging materials but not on the raw materials such as plastic granules, steel sheets/strips etc. used for making packaging materials. Raw materials like plastic granules or s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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