1. This appeal is directed against the order of the Collector of Central Excise (Appeals), Madras, dated 30-6-88 confirming the order of the Assistant Collector of Central Excise, Madras, dated Nil of 1988 directing the appellants to expunge the credit taken for one consignment of the input viz. Cotton seed oil in terms of Central Excise Notification 27/87 dated 1-3-87 read with Rules 57K and 57-O of the Central Excise Rules, 1944.
2. Shri Subramaniam, the learned counsel for the appellants, contended that Cotton seed oil is one of the inputs specified in Notification 27/87 cited supra for taking credit on condition that a declaration should have been filed in regard to the same before the proper authority in terms of Rule 57-O of the Central Excise Rules, 1944, hereinafter referred to as the 'Rules'. The learned counsel urged that it is not disputed that at the time when the appellants took credit in respect of the Cotton Seed Oil in question the appellants had not filed the declaration in terms of the Rules. The appellant had expunged the credit and had filed a declaration on 23-12-87 and, therefore, in terms of Rule 57-O of the Rules the appellants would be entitled to take credit in respect of Cotton seed oil in question though the same had been utilised earlier in finished product and end product cleared on payment of duty. The learned counsel submitted that the scope of Rule 57-O should be construed in favour of the appellants in the context of the facts of this case and mainly urged that there was no express bar or any prohibition by necessary implication in the appellants availing credit in respect of the inputs already utilised in the end-product without availment of credit.
4. We have carefully considered the submissions made before us. The short question that arises for our consideration is the scope of Rule 57-O of the Rules to appreciate the submissions of the learned counsel.
With regard to the plea for availment of credit in respect of Cotton Seed oil in terms of Notification 27/87 dated 1-3-87. For purpose of convenience of reference and better appreciation we reproduce hereunder Rule 57-O: "RULE 57-O, Procedure to the observed by the manufacturer.- (1) Every manufacturer intending to take credit under this section shall file a declaration with the Assistant Collector of Central Excise having jurisdiction over his factory, indicating the description of the final products manufactured in his factory and the inputs intended to be used in each of the said final products and such other information as the said Assistant Collector of Central Excise may require and obtain a dated acknowledgement of the said declaration.
(2) A manufacturer who has filed a declaration in Sub-rule (1) may, after obtaining the acknowledgement aforesaid, take credit of money on the inputs: Provided that no credit shall be taken unless the inputs are manufactured in the factory of manufacture of the final product or are received in the factory under a proper invoice or despatch note indicating the name and address of the supplier of the inputs: Provided further that the manufacturer shall ensure that the supplier is normally manufacturing or trading in such inputs and the name and address shown on the invoices are correct.
(3) A manufacturer of the final product shall maintain an account in Form RG23B, Parts I and II. (4) A manufacturer of the final products shall submit a monthly return to the Superintendent of Central Excise indicating the particulars of the inputs used during the month and the amount of credit taken, along with extracts of Parts I and II of RG23B. (5) A manufacturer of final products shall, on demand by the proper officer, submit the invoices under which the inputs have been received." 5. A perusal of the above Rule would bear out that an assessee is put under a statutory obligation to file a declaration indicating to the Department the input intended to be used in the manufacture of the finished product and Sub-rule(2) of Rule 57-O further makes it clear that a manufacturer, who has filed a declaration in terms of Sub-rule (1) may after obtaining the acknowledgement aforesaid take credit of money on the inputs. A plain reading of the Rule would make it clear that filing a declaration is a condition precedent and it is only after filing a declaration and intimating the Department the input which the manufacturer intends to use, which would presumably be only prospectively and only after satisfying the Assistant Collector of Central Excise with reference to any information which he may require and obtaining the ackowledgement may take the credit of money on the inputs. We are, therefore, not inclined to accept the plea of the learned counsel in regard to the availment of credit on input viz.
Cotton Seed Oil in the facts and circumstances of the case. We, therefore, affirm the impugned order appealed against and dismiss the appeal.