Judgment:
1. The Dy. Collector in the order-in-original has held that Firstly the party has not mentioned the correct measurement i.e. 'having width more than 600 mm and above', secondly the chapter heading is given as 7220.20. The description of the goods under sub-heading 7220.20 is 'flat rolled products of stainless steel of width of less than 600 mm not further worked than cold rolled'. It means the goods falling under this sub-heading should have width of less than 600 mm. It is therefore, quite clear that the inputs on which the modvat credit has been availed by the party are certainly CR coils having width of more than 600 mm and they should have been classified under sub-heading 7209 and not under 7220.20. The only mistake in the declaration filed by the party is that the correct sub-heading has not been mentioned. He therefore, dropped the demand of Rs. 1,65,310.39 against the appellants. On review of this order, an appeal was filed before the ld.Collr. (Appeals) who in his order held that the important aspect was whether the inputs received were declared or not and held that the inputs were not declared and admittedly reviewed the appeal. Against this order, the appellants have filed the present appeal.
2. Shri N.N. Sharma, ld. Constt. appearing for the appellants submits that the order passed by the Collr. (Appeals) is a non-speaking order inasmuch as the case-law cited has not been properly analysed and discussed. He submitted that against serial C(ii), the description of the inputs reads: "Cold rolled Mild Steel Strips in coil form/cold rolled coils and sub-heading 7211.51 was indicated. He submits that the only mistake in the declaration filed by them was that the correct sub-heading was not mentioned. Ld. Constt. submits that input was received in the factory; that duty was paid on the inputs and that the inputs were specified for purpose of Rule 57A; that the rate of duty on both the width namely, below 600 mm and exceeding 600 mm is the same.
Ld. Constt. submitted that the Tribunal in the case of Collector of Central Excise, Coimbatore v. Shri Ramakrishna Steel Industries, Coimbatore reported in 1991 (56) E.L.T. 456 (Tribunal) held that technicalities not to deny input credit. He submits that they had broadly described the product; that chapter number of the product was correctly stated ; that minor variation should not lead to denial of modvat credit available to them. He submits that their case is covered by this decision of the Tribunal. ld. Constt. also refers to the decision of this Tribunal in the case of Orient Steel Industries v. CCE under Order No. A/1561/96-NB, dated 13-6-1996 and submits that in this case, the Tribunal held that hot rolled coils not exceeding 600 mm for which no declaration was filed by the appellants, therefore, no modvat credit was allowed by the Asstt. Commr. but the Tribunal after considering the findings of the Co-ordinate Bench in an earlier case of Orient Steel Industries under Order No. A/115/96-NB, dated 8-1-1996 allowed the appeal by setting aside the impugned order. Ld. Constt.
submits that their case was fully covered by the ratio of the decision of Tribunal in this case and therefore, prays that the appeal may be allowed.
3. Shri V.R. Sethi, ld. DR appearing for the respondent Commr. submits that the appellants had actually used hot rolled coils as inputs exceeding 600 mm whereas in the declaration they had declared that they will be using hot rolled coils not exceeding 600 mm. He therefore, submits that the allegation of non-declaration of inputs is proved when the use of the inputs is examined vis-a-vis the declaration filed. He justifies the disallowance of modvat credit and prays that the appeal may be rejected.
4. Heard the submissions of both sides. The only issue for determination before me is as to whether declaration was made of the inputs. I observe that the declaration is required to be made under Rule 57G. Declaration was furnished by the appellants but in the declaration the product was described as hot rolled stainless steel not exceeding 600 mm in width. The admitted position is that the appellants actually used hot rolled sheets exceeding 600 mm. So the entire issue revolves round the width and the question that poses itself for solution is whether the declaration was sufficient even without considering the width and whether the precise mention of the width was essential for taking modvat credit. I note that the chapter heading that is the main chapter for both hot rolled stainless steel coils of 5 mm thickness and width either not exceeding 600 mm or exceeding 600 mm is the same-i.e. Chapter 72.I also observe that the Tribunal in the decision cited and relied upon by the appellants in the case of CCE v.Shri Ramakrishna Steel Industries held that technicalities should not come in the way of taking modvat credit. I also note that the Tribunal in an earlier case of the appellants herein had allowed modvat credit in spite of the fact that the product actually used was not declared in the declaration filed inasmuch as the width of the material was concerned. Having regard to the fact that broad description of the product was given in the declaration filed under Rule 57G, having regard to the fact that there was no difference in the quantum or rate of duty on account of width having regard to the fact that both the widths fell under Chapter 72 and also having regard to the fact that on similar issue, the Tribunal had allowed the appeal of the appellants.
Coupled with the fact that technicalities should not be the base for denying the substantive right accruing to the appellants, I hold that modvat credit shall be admissible to them.