9911796707
TMI Blog2008 (7) TMI 428X X X X Extracts X X X X X X X X Extracts X X X X ..... ]. - This reference petition has been filed by the Revenue under Section 35H(1), against the judgment of the learned Tribunal dated 13-6-2001, affirming the order of the Commissioner Central Excise (Appeals), Jaipur dated 26-12-2000, whereby the order-in-original passed by learned Assistant Commissioner allowing Modvat credit to the assessee, and imposing the penalty of Rs. 10,000/- under Rule 173Q(bb) for contravention of Rule 57G(l) had been affirmed. 2. It is contended in the application, that the substantial question of law is involved being :- "Can the Tribunal allow the modvat credit on grinding media balls of SH. 6907 7325.20 under rule 57A during the period from 24-4-1992 to 16-6-1994. When it is excluded from Rule 57A and is not an input for manufacture of final product i.e. Cement." 3. Show cause notice was issued to the assessee on 25-7-1994, and corrigendum was issued on 18-9-1995, for recovery of central excise to the tune of Rs. 4,04,387/- taken as Modvat credit on grinding media balls of ceramic, falling under sub-heading 6907.00, and of iron and steel falling under sub-heading 7325.20, of the Schedule to the Central Excise Tariff Act. It was alleged that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of specific type for which declaration was not filed, it was contested by the assessee, that the use of all grinding media is same in the manufacturing process, and nomenclature is changed due to change in the sub-heading of the Finance Bills, as also the Department's stand, that grinding media balls in general is not eligible for Modvat credit. Considering various decisions of the Tribunal, and Hon'ble the Supreme Court, it was found, that the Modvat credit cannot be disallowed for minor variations in the description, as also minor non-observance of technical formalities. As such the aforesaid order was passed. Then, regarding failure to declare input, it was found to be contravention of Rule 57G(l), attracting penal consequences under Rule 173Q(bb), but on that ground the Modvat credit was not found to be disallowable, as such the above order was passed. 7. The Revenue filed appeal, which was dismissed by the Commissioner (Appeals), following the earlier judgment in the matter of assessee itself, in CCE v. Durgapur Cement Works reported in 1997 (90) E.L.T. 197, Indian Rayon Industries Ltd. v. CCE, Jaipur reported in 1995 (76) E.L.T. 358, HMP Cements v. CCE reported in 2000 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y excluded from Rule 57A, and therefore, Modvat credit was not admissible. The next submission made is, that the assessee had not filed proper declaration, as required by Rule 57G, which cannot be regularised by imposing penalty on the assessee, rather the assessee was required to be held disentitled for Modvat credit, in absence of declaration. Learned counsel read to us the provisions of Rule 57A to be as under :- "57A. The provisions of this section shall apply to such finished excisable goods (hereinafter referred to as the "final product"), as the Central Government may, by notification in the Official Gazette, specify in this behalf, for the purpose of allowing credit of any duty of excise or the additional duty under section 3 of the Customs Tariff Act, 1975 (51 of 1975), as may be specified in the said notification (hereinafter referred to as the "specified duty") paid on the goods used in or in relation to the manufacture of the said final products (hereinafter referred to as the "inputs) and for utilising the credit so allowed towards payment of duty of excise leviable on the final products, whether under the Act or under any other Act, as may be specified in the said n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearly inputs, as defined in Rule 57A. Learned counsel submitted, that Rule 57A as read by the learned counsel for the Revenue is a subsequent legislation, which has no application to the present controversy, and the Rule 57A as it existed at the relevant time was read to us, to be reading as under :- "57A. Applicability. - (1) The provisions of this section shall apply to such finished excisable goods (hereinafter referred to as the "final products") as the Central Government may, by notification in the Official Gazette, specify in this behalf, for the purpose of allowing credit of any duty of excise or the additional duty under section 3 of the Customs Tariff Act, 1975 (51 of 1975), as may be specified in the said notification (hereinafter referred to as the "specified duty") paid on the goods used in or in relation to the manufacture of the said final products whether directly or indirectly and whether contained in the final products or not (hereinafter referred to as the "inputs") and for utilising the credit so allowed towards payment of duty of excise leviable on the final products, whether under the Act or under any other Act, as may be specified in the said notification, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said final products. Explanation - For the purposes of this sub-rule, it is clarified that even if the declared inputs are used directly by a manufacturer of final products, the credit of the declared duty shall, notwithstanding the actual amount of duty paid on such declared inputs, be deemed to be equivalent to the amount specified in the said notification and the credit of the declared duty shall be allowed to such manufacturer." 12. On the basis of this provision of Rule 57A it was contended, that of course there is exclusion clause excluding machines, machinery, plant, equipment, apparatus, tools appliances or capital goods as defined in Rule 57Q, used for producing or processing of any goods, or for bringing about any change in any substance, in or in relation to the manufacture of the final products, or used for any purpose in the factory. But then, even this exclusion clause excludes from out of these excluded items, component parts used in the manufacture of final product, inasmuch as the exclusion is of the aforesaid machines, machinery, plant, equipment, apparatus, tools, appliances or capital goods as defined in Rule 57Q, other than those used as component parts i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty of excise or the additional duty under section 3 of the Customs Tariff Act, 1975 (51 of 1975), as may be specified in the said notification (hereinafter referred to as the "specified duty") paid on the goods used in or in relation to the manufacture of the said final products whether directly or indirectly and whether contained in the final products or not (hereinafter referred to as the "inputs") and for utilising the credit so allowed towards payment of duty of excise leviable on the final products, whether under the Act or under any other Act, as may be specified in the said notification, subject to the provisions of this section and the conditions and restrictions that may be specified in the notification : Provided that the Central Government may specify the goods or classes of goods in respect of which the credit of specified duty may be restricted. Explanation - For the purposes of this Rule, "inputs" includes- (a) inputs which are manufactured and used within the factory of production, in or in relation to, the manufacture of final products, (b) paints and packaging materials, (c) inputs used as fuel, (d) inputs used for generat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner, we find, that the last ground being ground no. (ix) was taken by the Revenue, to the effect, that the declaration in respect of "balls" was not filed, and credit availed without filing proper declaration cannot be regularised by imposing penalty on the assessee. Thus, it appears that in the appeal before the learned Commissioner ground was taken to assail this part of the order of the Assistant Commissioner, but then from a look at the order of the learned Commissioner it does not transpire that the said ground was ever pressed. Otherwise, may be that the question about admissibility of Modvat credit was covered by the earlier judgment in the assessee's case but then it might have been possible for the learned Commissioner to come to any conclusion either ways, about eligibility of Modvat credit, or otherwise, on account of non-submission of declaration. Be that as it may. The fact remains that this contention has not been considered by the learned Commissioner. In this sequence a look at the memo of appeal filed before the learned Tribunal shows, that in this entire appeal there is not even a whisper on the side of the Revenue, on this aspect, either on the basis, tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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