Colgate Palmolive (i) Ltd. Vs. Collector of C. Excise - Court Judgment

Excerpt:
1. this is an appeal against the order-in-appeal no. a-57/93 [v-2a(mv)/9/93/598] dated 19-4-1993 of collector of central excise (appeals), pune.2. the facts of the case are that the appellants are engaged in the manufacture of toilet soap. they have filed mod vat declaration, which inter alia, contain the description "perfumes" as one of the inputs and its classification has been indicated under chapter heading 3303.00 of the tariff. there is no dispute that this declaration was filed with the proper officer namely the assistant collector of central excise on 16-7-1990. however, they noticed that some of the gate passes, under which perfumes were received, were classified under chapter heading 3302.90 and an audit objection was also taken to the effect that these inputs received under 3302.90 [were] not eligible for modvat credit in the absence of declaration, they filed a supplementary declaration on 15-4-1991 giving the description "perfume" with tariff classification 3302.90. however, this declaration came to be filed in the range office of the superintendent of central excise and reportedly acknowledged by the inspector in the range. two show cause notices were issued, both reportedly within the normal period of limitation, alleging that this declaration filed with assistant collector does not cover odiferous substance/perfumes classifiable under "3302.90. in the adjudication proceedings held by the assistant collector, the duty demand for the period april 1991 to july 1991 and august 1991 to november 1991 by reversing the modvat credit was ordered by the assistant collector and this order was confirmed by the collector (appeals), in appeal. hence the present appeal has come before the tribunal.3. shri arshad hidayatullah, the ld. sr. counsel for the appellants, refers to the first declaration dated 16-7-1990 and the supplementary declaration dated 15-4-1991 to plead that they have declared perfumes in both the declarations. the tariff classification earlier indicated by them was 3303.00, whereas on noticing that gate passes bear description "perfume" classifying under chapter heading 3302.90 they filed the supplementary declaration on 15-4-1991 with the range superintendent. even this is in confirmity with the board's instructions permitting filing of declaration in the range office. on account of this, it cannot be held that the second declaration is not valid. moreover, it is not correct to hold that the inputs received are not covered by the first declaration of 16-7-1990, since all odiferous substances including perfumes are known generally in the market as "perfumes" and this was their understanding while making the declaration both on 16-7-1990 as well as on 15-4-1991 and the tariff classification is not in their hands and change in the classification is not to be held against them.4. shri k.m. mondal, the ld. sdr, however, refers to the findings of the collector (appeals), to point out that what has been received as the input is mosiferous substance, which is different from perfumes. as per the tariff, per-umes are alcohol based, whereas odiferous substances classifiable under chapter heading 3302.90 are mixture of odiferous substances and compound, once both are distinct, the description "perfumes" cannot cover mixture of odiferous substances classifiable under chapter heading 3302.90. he therefore would plead that since demands are within the normal period of limitation and hese items are not covered by valid declaration, they should be construed to be not eligible for modvat credit.5. after hearing both the sides, we find that the gate passes relating to he inputs, for which modvat credit has been denied indicates the descrip on as below :- the appellants have described the input as "perfume" even in their first declaration filed with the assistant collector on 16-7-1990. this description is not only in accordance with their intention to cover all odiferous substances but also found to be reflected in some of the gate passes, against which these inputs were received. we do not dispute that for the purposes of tariff classification, perfumes and mixture of odiferous substances are covered by different headings. but when a declaration has been given indicating the description of the input as "perfume" and the description in the gate pass also indicates this description, it cannot be held that the declaration does not cover the input. tariff classification is not in their hands and variation in tariff classification between the declaration and the gate pass cannot deny the substantive benefit, so long as both the tariff headings are eligible for modvat benefit as per the notification issued under rule 57a. in the circumstances, we are to hold that even their earlier declaration made on 16-7-1990 giving the description 'perfume' should cover, not only perfumes containing alcoholic base but also other odiferous substances and mixture thereof. if they have filed the sup- plementary declaration giving the tariff description 3302.90, that is on account | of the fact that some of the gate passes describing perfume classifiable under that aforesaid heading have been received by them. hence even ignoring the second declaration, they seem to be eligible for the substantive benefit. it is also observed that both the sub-heading are eligible for modvat credit and there could not have been any intention in not declaring odiferous substances classifiable under 3302.90 deliberately. their intention is to avail modvat benefit in respect of odiferous substances known generally as 'perfume', as is evident from their declaration for 'perfumes', not only in their declaration of 16-7-1990 but also in their subsequent declaration dated 15-4-1991. in the circumstances, we are to hold that the appellants have complied with the requirements of the! declaration of input as envisaged under rule 57g of the central excise rules in respect of the perfumes classifiable under chapter heading 3302.90 as well as other mixtures of odiferous substances classifiable under 3302.90. moreover, when the supplementary declaration clearly mentions tariff heading 3302.90 and such a declaration has been received in the range office, it should have been transmitted to the assistant collector, if the range staff are not the proper authority to receive the same. however, shri mondal, the ld. sdr, pleads thai earlier six declarations have been filed with the assistant collector and this is the solitary declaration, which is reported to have been filed in the range office and hence filing of such declaration with the range office is open to doubt particularly when the office stamp of the range office is not available in the declaration. however, we find that there is a dated signature of a person in token of acknowledgement. no investigation has been made to indicate thai this is a forged signature of somebody and the declaration has been plantec} subsequently. in any case, even without recourse to second declaration, appeal has to be allowed on the basis of the first declaration itself. hence, we would not like to express any final opinion on the validity of the second declaration appeal is allowed and consequently demands for reversal of modvat credit are set aside.

Judgment:
1. This is an appeal against the Order-in-Appeal No. A-57/93 [V-2A(MV)/9/93/598] dated 19-4-1993 of Collector of Central Excise (Appeals), Pune.

2. The facts of the case are that the appellants are engaged in the manufacture of toilet soap. They have filed MOD VAT declaration, which inter alia, contain the description "perfumes" as one of the inputs and its classification has been indicated under Chapter Heading 3303.00 of the Tariff. There is no dispute that this declaration was filed with the proper officer namely the Assistant Collector of Central Excise on 16-7-1990. However, they noticed that some of the Gate Passes, under which perfumes were received, were classified under Chapter Heading 3302.90 and an audit objection was also taken to the effect that these inputs received under 3302.90 [were] not eligible for MODVAT Credit in the absence of declaration, they filed a supplementary declaration on 15-4-1991 giving the description "perfume" with Tariff classification 3302.90. However, this declaration came to be filed in the Range Office of the Superintendent of Central Excise and reportedly acknowledged by the Inspector in the Range. Two Show Cause Notices were issued, both reportedly within the normal period of limitation, alleging that this declaration filed with Assistant Collector does not cover odiferous substance/perfumes classifiable under "3302.90. In the adjudication proceedings held by the Assistant Collector, the duty demand for the period April 1991 to July 1991 and August 1991 to November 1991 by reversing the MODVAT Credit was ordered by the Assistant Collector and this order was confirmed by the Collector (Appeals), in appeal. Hence the present appeal has come before the Tribunal.

3. Shri Arshad Hidayatullah, the Ld. Sr. Counsel for the appellants, refers to the first declaration dated 16-7-1990 and the supplementary declaration dated 15-4-1991 to plead that they have declared perfumes in both the declarations. The Tariff classification earlier indicated by them was 3303.00, whereas on noticing that gate passes bear description "perfume" classifying under Chapter Heading 3302.90 they filed the supplementary declaration on 15-4-1991 with the Range Superintendent. Even this is in confirmity with the Board's Instructions permitting filing of declaration in the Range Office. On account of this, it cannot be held that the second declaration is not valid. Moreover, it is not correct to hold that the inputs received are not covered by the first declaration of 16-7-1990, since all odiferous substances including perfumes are known generally in the market as "perfumes" and this was their understanding while making the declaration both on 16-7-1990 as well as on 15-4-1991 and the Tariff classification is not in their hands and change in the classification is not to be held against them.

4. Shri K.M. Mondal, the Ld. SDR, however, refers to the findings of the Collector (Appeals), to point out that what has been received as the input is mosiferous substance, which is different from perfumes. As per the Tariff, per-umes are alcohol based, whereas odiferous substances classifiable under Chapter Heading 3302.90 are mixture of odiferous substances and compound, once both are distinct, the description "perfumes" cannot cover mixture of odiferous substances classifiable under Chapter Heading 3302.90. He therefore would plead that since demands are within the normal period of limitation and hese items are not covered by valid declaration, they should be construed to be not eligible for MODVAT Credit.

5. After hearing both the sides, we find that the gate passes relating to he inputs, for which MODVAT Credit has been denied indicates the descrip on as below :- the appellants have described the input as "perfume" even in their first declaration filed with the Assistant Collector on 16-7-1990. This description is not only in accordance with their intention to cover all odiferous substances but also found to be reflected in some of the gate passes, against which these inputs were received. We do not dispute that for the purposes of Tariff classification, perfumes and mixture of odiferous substances are covered by different headings. But when a declaration has been given indicating the description of the input as "perfume" and the description in the gate pass also indicates this description, it cannot be held that the declaration does not cover the input. Tariff classification is not in their hands and variation in Tariff Classification between the declaration and the gate pass cannot deny the substantive benefit, so long as both the Tariff Headings are eligible for MODVAT benefit as per the notification issued under Rule 57A. In the circumstances, we are to hold that even their earlier declaration made on 16-7-1990 giving the description 'perfume' should cover, not only perfumes containing alcoholic base but also other odiferous substances and mixture thereof. If they have filed the sup- plementary declaration giving the Tariff description 3302.90, that is on account | of the fact that some of the gate passes describing perfume classifiable under that aforesaid heading have been received by them. Hence even ignoring the second declaration, they seem to be eligible for the substantive benefit. It is also observed that both the sub-heading are eligible for MODVAT Credit and there could not have been any intention in not declaring odiferous substances classifiable under 3302.90 deliberately. Their intention is to avail MODVAT benefit in respect of odiferous substances known generally as 'perfume', as is evident from their declaration for 'perfumes', not only in their declaration of 16-7-1990 but also in their subsequent declaration dated 15-4-1991. In the circumstances, we are to hold that the appellants have complied with the requirements of the! declaration of input as envisaged under Rule 57G of the Central Excise Rules in respect of the perfumes classifiable under Chapter Heading 3302.90 as well as other mixtures of odiferous substances classifiable under 3302.90. Moreover, when the supplementary declaration clearly mentions Tariff Heading 3302.90 and such a declaration has been received in the Range Office, it should have been transmitted to the Assistant Collector, if the range staff are not the proper authority to receive the same. However, Shri Mondal, the ld. SDR, pleads thai earlier six declarations have been filed with the Assistant Collector and this is the solitary declaration, which is reported to have been filed in the Range office and hence filing of such declaration with the Range office is open to doubt particularly when the office stamp of the range office is not available in the declaration. However, we find that there is a dated signature of a person in token of acknowledgement. No investigation has been made to indicate thai this is a forged signature of somebody and the declaration has been plantec} subsequently. In any case, even without recourse to second declaration, appeal has to be allowed on the basis of the first declaration itself. Hence, we would not like to express any final opinion on the validity of the second declaration Appeal is allowed and consequently demands for reversal of MODVAT Credit are set aside.