Thapar Ispat Ltd. Vs. Collector of Central Excise

Thapar Ispat Ltd. vs Collector of Central Excise

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Delhi Decided Jul 08, 1996

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Citation: sooperkanoon.com/9714
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On: Jul 08, 1996
Subject: Service Tax

Case Summary

AI-generated summary - not the official court judgment text.

Service Tax

Key legal issue: Service Tax

Parties & Advocates

Appellant / Petitioner

Thapar Ispat Ltd.

Respondent

Collector of Central Excise

Legal References

Reported In: (1996)(86)ELT548TriDel

Excerpt

.....invoice was mill roll and the word "def" were added later, shri santhanam maintained that his clients has not added these words nor had they altered the description on the invoice in any manner. the challan under rule 52a had been issued by the manufacturer from his factory and the challan under which the goods were received by the appellants issued by the stock yard of the manufacturer. it was possible that the person in the stock-yard could have amplified the description by adding the words. he stated that this alteration in the description could not amount to any wilful action of his client rendering them liable to a penalty. he further submitted that in holding the alleged alternations in the invoice as the ground for imposition of penalty, the original authority has gone beyond the scope of the show cause notice thus rendering the order unsustainable.in substantiating his arguments he relied upon the judgment of the supreme court in the case of h.m.m. ltd. -1995 (76) e.l.t. 497.3. shri y.r. kilaniya, ld. jdr arguing for the department stressed the fact that the goods in question did not figure in the declaration filed by the assessee, and that the invoices were altered and on these grounds imposition of penalty was fully justified.4. i have carefully considered all the arguments advanced by both the sides and have perused the relevant records.5. as per the show cause notice the goods namely mill roll spoils or defective roll spoils were not specifically declared by the assessee. i have examined the copy of the said declaration placed on record by the ld. advocate. the declaration covered almost all goods falling under tariff headings 72, 73, 75, 76 and 81. the various description given in the various headings of the said declaration are exhaustive, covering goods from the primary forms to the finished products and scrap of each variety. apart from the general description of waste and scrap, specific inclusion is made for waste and scrap resulting from ship.....

Full Judgment

1. The assessee manufactured steel ingots and filed claim for Modvat credit on various inputs declared by them vide their declaration, dated 11/16-12-1992. During the scrutiny of their RT 12 returns for the month of October, 1993, the officers observed that credit had been taken on certain inputs described in the covering challan as DBF. Any mill roll spoil or DEF roll spoils any mill metal. Holding that this description did not occur in the declaration of inputs filed by them, a show cause notice was issued seeking reversal of the credit already taken on this ground and imposition of penalty on the assessee. In his order the Deputy Collector confirmed the demand and imposed a penalty of Rs. 20,000/- on the assessee. In the appeal proceedings the order was upheld in toto. The present appeals are against this order of the Collector, dated 25-9-1995.

2. Shri R. Santhanam, advocate arguing for the appellants submitted the copy of the impugned declaration and claimed that the cited inputs were duly declared in this declaration. Citing the order of the Tribunal No.A/449/96-NB, dated 14-2-1996, he argued that if there was a minor variation in the declaration when compared with the covering documents, substantial benefit should not be taken away. He stated that scrap in its various forms had been declared in the declaration and the description in the invoice would denote only scrap. In this argument he relied upon the judgment of the Tribunal in the case of Plaza Steel Ltd. - 1993 (68) E.L.T. 213. Arguing on the findings of the original authority that the description on the invoice was mill roll and the word "Def" were added later, Shri Santhanam maintained that his clients has not added these words nor had they altered the description on the invoice in any manner. The challan under Rule 52A had been issued by the manufacturer from his factory and the challan under which the goods were received by the appellants issued by the stock yard of the manufacturer. It was possible that the person in the stock-yard could have amplified the description by adding the words. He stated that this alteration in the description could not amount to any wilful action of his client rendering them liable to a penalty. He further submitted that in holding the alleged alternations in the invoice as the ground for imposition of penalty, the original authority has gone beyond the scope of the show cause notice thus rendering the order unsustainable.

In substantiating his arguments he relied upon the judgment of the Supreme Court in the case of H.M.M. Ltd. -1995 (76) E.L.T. 497.

3. Shri Y.R. Kilaniya, ld. JDR arguing for the department stressed the fact that the goods in question did not figure in the declaration filed by the assessee, and that the invoices were altered and on these grounds imposition of penalty was fully justified.

4. I have carefully considered all the arguments advanced by both the sides and have perused the relevant records.

5. As per the show cause notice the goods namely mill roll spoils or defective roll spoils were not specifically declared by the assessee. I have examined the copy of the said declaration placed on record by the ld. advocate. The declaration covered almost all goods falling under tariff Headings 72, 73, 75, 76 and 81. The various description given in the various headings of the said declaration are exhaustive, covering goods from the primary forms to the finished products and scrap of each variety. Apart from the general description of waste and scrap, specific inclusion is made for waste and scrap resulting from ship breaking and also products like mill roll products, ingots and bars which are defective and therefore not usable as such. On perusal of the declaration it becomes very clear that the belief of the department that the impugned goods were not covered under the declaration filed by the assessee is without basis.

6. The fact that these goods were scrap is not in dispute. It has been very clearly certified to be so by M/s TISCO in their letter dated 25-10-1994. It has been clarified that the word "def" must have been subsequently added after the issue of the challan. The gravity of the addition of this word is carried to the extent that it has formed the basis of imposition of penalty. It has not been established in either forum that it was the present assessee who were instrumental in addition of this word. It is the plea of the ld. advocate that this clarificatory addition may have been made at the nearest station namely Burnpur stockyard. The issue really is academic. What is meant by the word "def" is 'defective'. This word is indicative of the goods being scrap and since the scrap in all its forms has been declared by the assessee, the admissibility of the goods as eligible inputs is beyond doubt.

7. On perusal of the declaration, it is very clear that the order denying the Modvat and also of imposition of penalty is not sustainable. The appeal is allowed. The lower order set aside.

Consequential relief is ordered.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Delh... Same Parties Thapar Ispat Ltd. vs Collector of Central Excise Same Subject Service Tax