1991 (9) TMI 175 - Commissioner - Central Excise

Summary

Issues:
Review of Order-in-Original under Section 35E(4) of the Central Excises and Salt Act, 1944 - Availing Modvat credit facility under Rule 57A of the Rules - Declaration of detailed description of inputs under Rule 57G - Denial of credit based on lack of specific Heading and Sub-heading declarations - Interpretation of Modvat credit rules.

Detailed Analysis:

1. The Department filed an application for review of the Order-in-Original passed by the Asstt. Collector, seeking recovery of an amount from the respondent for not declaring detailed descriptions of inputs under Rule 57G. The Asstt. Collector had allowed the credit despite the lack of specific Heading and Sub-heading declarations, considering the broad descriptions provided by the respondent.

2. During a personal hearing, the respondent cited a case law where the Tribunal allowed Modvat credit based on initial broad descriptions of inputs. The Tribunal's decision in the cited case supported the respondent's position regarding the declaration of inputs under broad descriptions.

3. The main issue was whether the Asstt. Collector's decision to allow Modvat credit based on broad descriptions instead of specific Heading and Sub-heading declarations was valid. The Department contended that specific declarations were necessary for availing credit, while the respondent argued that the broad descriptions sufficed as per previous Tribunal decisions.

4. The Asstt. Collector's decision was supported by the fact that the inputs were received under declared descriptions covered by relevant notifications for Modvat credit. Minor discrepancies in declarations were deemed insufficient to deny credit, especially when the inputs were used in the manufacturing process as intended.

5. Specific examples of inputs declared by the respondent, such as Molecular Sieve and Diagnostic Reagent Kits, were noted to have been declared under broad descriptions, meeting the overall requirements of the Modvat rules.

6. Considering the overall compliance with the Modvat rules by the respondent and the utilization of inputs in the final products, the Asstt. Collector's decision to allow the credit was upheld. The lack of specific Heading and Sub-heading declarations was not deemed a sufficient reason to interfere with the original order.

7. The application for review was rejected, affirming the Asstt. Collector's decision to allow Modvat credit based on broad descriptions of inputs, in line with previous judicial interpretations emphasizing substantial compliance over minor discrepancies in declarations.