Full Judgment
Being aggrieved from the impugned order the Collector of Central Excise, Chandigarh has come up in appeal.
2. On behalf of the Revenue the learned JDR Shri S.K. Sharma stated that in terms of Rule 57G of the Central Excise Rules the manufacturer intending to take credit of duty on inputs under Rule 57A is required to file a declaration with the Assistant Collector of Central Excise having jurisdiction over his factory intimating the description of the final product to be manufactured and the inputs intended to be used in each of the final products and after obtaining the acknowledgement of the declaration he can take credit of the duty paid on the inputs received by him. He contended that the MODVAT credit claimed by the respondents on duty paid runners and risers claimed to have been used as input was correctly disallowed by the Assistant Collector since in the declaration filed under Rule 57G runners and risers had not been specifically mentioned. He argued that the declaration of the description of the inputs intended to be used by the manufacturer was mandatory in terms of Rule 57G, and there was no force in the order passed by the Collector (Appeals) that the mentioning of the relevant tariff heading in the declaration was sufficient. In this regard he placed reliance on the Tribunal's decision in the case of Paro Food Products v. CCE reported in 1988 (38) E.L.T. 332.
3. On behalf of the respondents the learned advocate Shri K.K. Anand stated that in the declaration filed under Rule 57G the inputs were described as ingot falling under Tariff Heading 7206.90 which covers "Iron and Non-alloy steel in ingots and other primary forms". He added that even though ingots were declared as inputs, runners and risers which arise during the manufacture of ingots being ingots in irregular form should be deemed as covered by the declaration filed under Rule 57G since they were also classifiable along with ingots under Heading 7206.90 which was incorporated in the declaration. He argued that the failure to mention runners and risers in the declaration under Rule 57G only amounted to a procedural lapse and would not be the ground for denying the credit as rightly held by the Collector (Appeals). In support of his contention he placed reliance on the following decisions :- (i) Madras Fabricators v. CCE, Madras -1990 (47) E.L.T. 292 (Tribunal) (ii) CCE, Bombay v. Goodlass Nerolac Paints - 1986 (26) E.L.T. 57 (Tribunal).
4. I have gone through the record of the case and considered the submissions made on behalf of both sides. It is seen that the short point arises for consideration in this case is whether the omission on the part of the respondents to specifically mention in the declaration under Rule 57G "runners and risers" used by them as input in the manufacture of the final product would amount to only as a procedural impropriety entitling them to MODVAT credit as long as the tariff heading under which the input in question is classifiable is mentioned in the declaration. In this regard I find that in interpreting the scope and ambit of Rule 57G(2) the Tribunal has in a number of decisions taken the view that the manufacturer who fails to file a declaration under Rule 57G specifying the particular input would not be entitled to take credit of duty paid on the inputs received by him under the MODVAT Scheme. In the case of Paro Food Products v. CCE reported in 1988 (38) E.L.T. 332 the Tribunal held that availment of MODVAT credit for metal containers was not permissible when the declaration filed under Rule 57G indicated packing materials. The relevant extract from the Tribunal's decision is reproduced below :- "We have carefully considered the submissions made before us. We are not able to accede to the plea of the learned Consultant in regard to the availment of the MODVAT credit for metal containers. It is not disputed before us and is indeed admitted that the appellant had not filed any declaration in respect of "metal containers" for availing MODVAT credit. In interpreting the scope and ambit of Rule 57G(2) this Tribunal in a number of decisions has already taken the view that a manufacturer who has not filed a declaration under Rule 57G will not be entitled to take credit of duty paid on the inputs received by him under the MODVAT scheme. The plea of the learned Consultant that it is only a condonable lapse or irregularity is not acceptable. We, therefore, do not find any merits in the appeal. The appeal is accordingly dismissed."Usha Mann Industries Ltd. v. CCE reported in 1990 (46) E.L.T. 392 wherein it was held that in the absence of Dynodrive being specifically described in the declaration filed under Rule 57G MODVAT credit on Dynodrive used as input in the manufacture of final product would not be permissible even if Dynodrive falls in the category of Electric Motors which were included in the declaration filed by the manufacturer.
6. The appellants have relied on the Tribunal's decision in the case of CCE, Bombay v. Goodlass Nerolac Paints reported in 1986 (26) E.L.T. 57 (Tri.) wherein it was held that the procedural aspect can be ignored once the authorities are satisfied about the receipt and the utilisation of duty paid raw material. The facts in this case before us being different, in view of the decisions quoted above the case law cited by the respondents do not help them.