Hindustan Lever Ltd. Vs. Commissioner, Central Excise - Court Judgment

Excerpt:
1. heard both sides. the issue relates to modvat credit on inputs under rule 57-i and interest under rule 57-i(3) and penalty of rs. 25,000/-(twentyfive thousand). the ld. counsel submitted that irrespective of the fact that chapter heading is different in the declaration even then the minor variations in heading cannot disqualify the modvat credit. the main point of denial of modvat credit appears to be that the appellants have not filed any declaration under rule 57g.the contention of the appellant is that under rule 57g (1) of cer, 1944 on 1.3.1997 describing it as "ppt silica" under s.h.no. 2811.90 and the silica supplied by different supplier is used inter-exchangeable in the process without any change. to support his contention the ld. counsel submitted that "flow aid silica polymer" and "ppt silica" both are same as certified by the production manager and also relied on the decision of the tribunal. ld. counsel relied on the following decisions:j.b.m. tools ltd v. commissioner of central excise, pune - wherein it has been held that even though the declaration find in the extended period for modvat credit cannot be denied. (ii) cbec circular no. 441/7/99-cx dated 23.2.1999 to show that the modvat credit should not be denied on procedural lapses.kamakhya steels (p) ltd. v. commissioner of central excise, meerut where the declaration was filed and larger bench denied and matter kept for re-examination. ld. counsel also relied on rule 57g(ii). this shows that credit under sub-rule 2 was not denied on the ground that: i. any of the documents, mentioned in sub-rule(3) does not contain all the particulars required to be contained therein under these rules, if such documents contains details of payment of duty, description of the goods assessable value, name and address of the factory or warehouse. ii. the declaration filed under sub-rule (1) does not contain all the details required to be contained therein or the manufacturer fails to comply with any other requirements under sub-rule (1). provided that the assistant commissioner of central excise having jurisdiction over the factory of manufacturer intending to take credit is satisfied that duty due on the inputs has been paid and such inputs have actually been used or are to be used in the manufacture of final products, and such assistant commissioner shall record the reasons for not denying the credit so in each case].monnet industries ltd v. cce, meerut 2003 (58) rlt 39(cegat-del) page-39. this indicates that modvat credit cannot be denied on the ground of declaration given not specific restriction of capital goods.after hearing the ld. counsel and on perusal of the of the records i do not find any reason for the denial of the modvat credit.5. i therefore, remand the matter to the adjudicating authority to pass fresh speaking order in the matter after taking into consideration the decisions mentioned above.

Judgment:
1. Heard both sides. The issue relates to modvat credit on inputs under Rule 57-I and interest under Rule 57-I(3) and penalty of Rs. 25,000/-(Twentyfive thousand). The ld. Counsel submitted that irrespective of the fact that chapter heading is different in the declaration even then the minor variations in heading cannot disqualify the modvat credit. The main point of denial of modvat credit appears to be that the appellants have not filed any declaration under Rule 57G.The contention of the appellant is that under Rule 57G (1) of CER, 1944 on 1.3.1997 describing it as "PPT SILICA" under S.H.No. 2811.90 and the silica supplied by different supplier is used inter-exchangeable in the process without any change. To support his contention the ld. Counsel submitted that "Flow Aid Silica Polymer" and "PPT Silica" both are same as certified by the production manager and also relied on the decision of the Tribunal. ld. Counsel relied on the following decisions:J.B.M. Tools Ltd v. Commissioner of Central Excise, Pune - wherein it has been held that even though the declaration find in the extended period for modvat credit cannot be denied.

(ii) CBEC circular No. 441/7/99-CX dated 23.2.1999 to show that the modvat credit should not be denied on procedural lapses.Kamakhya Steels (P) Ltd. v. Commissioner of Central Excise, Meerut where the declaration was filed and larger bench denied and matter kept for re-examination. Ld. Counsel also relied on Rule 57G(ii). This shows that credit under Sub-rule 2 was not denied on the ground that: i. Any of the documents, mentioned in Sub-rule(3) does not contain all the particulars required to be contained therein under these rules, if such documents contains details of payment of duty, description of the goods assessable value, name and address of the factory or warehouse.

ii. The declaration filed under Sub-rule (1) does not contain all the details required to be contained therein or the manufacturer fails to comply with any other requirements under Sub-rule (1).

Provided that the Assistant Commissioner of Central Excise having jurisdiction over the factory of manufacturer intending to take credit is satisfied that duty due on the inputs has been paid and such inputs have actually been used or are to be used in the manufacture of final products, and such Assistant Commissioner shall record the reasons for not denying the credit so in each case].Monnet Industries Ltd v. CCE, Meerut 2003 (58) RLT 39(CEGAT-Del) page-39. This indicates that modvat credit cannot be denied on the ground of declaration given not specific restriction of capital goods.

After hearing the ld. Counsel and on perusal of the of the records I do not find any reason for the denial of the modvat credit.

5. I therefore, remand the matter to the adjudicating authority to pass fresh speaking order in the matter after taking into consideration the decisions mentioned above.