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TMI Blog1994 (7) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... oods as LDPE and even though there was mistake in regard to sub-heading of the tariff heading the petitioners had mentioned the correct chapter heading of the goods and they became eligible for the benefit of Modvat benefit in terms of Rule 57A for the first time since Nov., 1992. It was urged that an error in sub-heading should not be a reason for disallowing the Modvat Credit since the goods described in the declaration correspond with the description given in the gate pass. It was urged that the goods were purchased by the petitioners from IPCL, a Government of India undertaking. The learned Counsel further submitted that in similar circumstances, the authorities have given the benefit of Modvat credit in respect of HDPE granules and since there is no dispute in regard to the identity of the goods in question and since there is no Revenue implication, the Modvat Scheme should be liberally construed in favour of the petitioners. The learned Counsel also submitted that an error in regard to sub-heading of the Chapter is only a procedural irregularity. The learned Counsel also placed reliance on the ratio of the following rulings : (1)Collector of C. Ex. v. Triton Valves Ltd. rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Excise, reported in 1990 (47) E.L.T. 28 (Tribunal). The ratio of these decisions is that the assessee is entitled to take Modvat credit in respect of such of those inputs in respect of which a specific declaration filed in this regard would not suffice. The ratio of these decisions has been upheld by the Hon ble Supreme Court while dismissing the Civil Appeal filed by M/s. Ajanta Steel Corporation against the Order No. 1993-NRB and Misc. Order No. Misc/208/93-NRB, dated 12-5-1993. In that case the Tribunal has held that the general description given in the declaration for the inputs as rolling/re-rolling/re-rolled material was not adequate for taking deemed Modvat credit under Rule 57G(2) and the Tribunal had followed its earlier ruling in the case of Paro Food Products, referred to supra, while deciding this matter. The above has been reported in 1994 (69) E.L.T. A 169 (1st February issue) as under : Modvat Deemed Credit - Specific description of input necessary The Supreme Court Bench comprising of Hon ble Mr. Justice P.B. Sawant and Hon ble Mr. Justice Yogeshwer Dayal on 28-10-1993 has dismissed the Civil Appeal (C.A. No. 4682 of 1993) filed by M/s. Ajanta Steel Corpora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A High Density Polyethelene Tapes 39 High DensityPolyethelene 3901.20 B High Density Polyethelene Sacks 39 High DensityPolyethelene Fabric 3926.90 HDPE Fabric Low Density Polyethelene 3920.32 Master Batch 3206.90 Poly white 3906.90 Inks 3215.00 Reducers 3814.006 It is seen that in respect of both the inputs viz. High Density Polyethelene and Low Density Polyethelene so far as the description is concerned it is similar inasmuch as it has not been stated whether the material is in the form of granules or in any other form including sheets or fabrics etc. as seen under the heading `Inputs at Sl. Nos. A and B. It is, however, seen against both these items the tariff heading under which the goods would fall has been shown against the item High Density Polyethelene Tariff 3901.20 and against Low Density Polyethelene Tariff 3920.32. The learned lower appellate authority has allowed the benefit of Modvat credit in respect of HDPE granules, while rejecting the applicant s cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... latest being that of the North Regional Bench in the case of Collector of Central Excise, Chandigarh v. Ganesh Steel Industries, reported in 1992 (60) E.L.T. 271 (T) = 1992 (19) E.T.R. 367. The learned lower appellate authority s order prima facie cannot be found fault with on this ground also. The ratio of the decisions of the Tribunal cited by the applicants, in view of the specific rulings on the point at issue, is therefore, not applicable to the issue before us prima facie. 8. The learned Advocate for the applicants pleaded that the applicants are in a bad financial shape and applicants have applied for a declaration of the unit as a sick unit within the meaning of clause (o) of Section 3(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 before the B.I.F.R. under Section 15 of the said Act. It is observed that the applicants turnover for the year ending 31st March, 1993 is over Rs. 1.76 crores and the applicants have an amount of Rs. 41 lakhs shown against sundry debtors/deposits and have also advanced an amount of over Rs. 11,76,832 which is recoverable in cash. The applicants have also access to loans, both secured and un-secured, and have loans outstand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erence to the inputs used by them. In so declaring, they declared the item as LDPE and the tariff heading of the same was not correctly given by them. They have given the Tariff Heading as 3920.32. 12. Sh. Sampath, the learned Counsel for the applicant, drew my attention to the fact that the applicants are using LDPE granules in the manufacture of final product. But, they have not specifically mentioned granules and in giving the classification they gave a wrong classification of the tariff heading. Had they declared LDPE granules then they certainly would have been entitled for the modvat credit. Therefore, it was his contention that the department would not be prejudiced and it is not the case of the department that if they had declared the same the applicant was not entitled for the Modvat credit. He pointed out that in such circumstances, in can only be treated as a procedural irregularity and for procedural irregularity Modvat credit should not be denied. He also relied on several decisions of the Tribunal as well as the decision of the Supreme Court reported in 1991 (55) E.L.T. 437 para 11. 13. Sh. Murugandy, the learned DR, vehemently contended before me that the applica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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