Ashoka Foundry vs Commissioner of Central Excise, Jamshedpur>2001(01)LCX0253

2001(01)LCX0253

IN THE CEGAT, EASTERN BENCH, KOLKATA

Smt. Archana Wadhwa, Member (J)

ASHOKA FOUNDRY

Versus

COMMISSIONER OF C. EX., JAMSHEDPUR

Order No. A-99/CAL/2001 & Stay Order No. S-60/CAL/2001, dated 23-1-2001 in SP/535/2000 and in Appeal No. E/460/2000

Advocated By : Shri B.J. Mookherjee, Advocate, for the Appellant.

Shri A.K. Chattopadhyay, JDR, for the Respondent.

[Order]. - After dispensing with the condition of pre-deposit of duty amount of Rs. 86,441.00 and penalty of Rs. 5,000.00, I take up the appeal itself, as the issue lies in a narrow compass.

2. The appellants had filed a declaration on 24-11-1994 under provisions of Rule 57G declaring the inputs for the purpose of availing the Modvat credit. One of the inputs declared by the appellants was copper waste and scrap falling under Heading 7404.00. As the waste and scrap of copper received by the appellants mostly consisted of breaking of ships and the same was also covered by the said Heading 74.04, there was no dispute about the availment of Credit. However, with effect from 16-3-1995, another Tariff Heading 7420.00 was introduced in the Tariff specifically covering the goods and materials obtained by breaking of ships. In February, 1996, the appellants availed the Credit in respect of the copper and articles thereof, which were obtained by breaking of ships. The Department entertained a view that since with effect from 16-3-1995, a separate entry for the said goods has been introduced, the appellants should have filed a fresh declaration indicating a separate Heading 7420.00 for the said materials. Since it was not done, the availment of credit was incorret.

3. On the other hand, the appellants contended that they had been availing the Credit in respect of the said materials by declaring them as waste and scrap right from the inception of their factory. Inasmuch as the declaration in respect of the same very goods was already on record, they did not feel necessary to file a separate declaration indicating new Tariff Heading. In any case, the Modvat credit was taken on 10-2-1996 and a revised declaration incorporating that Heading 7420.00 was filed by them on 31-5-1996. The Assistant Commissioner in terms of the provisions of Rule 57G(5) should have condoned the delay in filing the said declaration. There was no justification for denying the benefit of Modvat credit.

4. After giving my careful consideration to the submissions made from both sides, I find that it is not a case where no declaration was at all filed by the appellants in respect of the goods and materials of Chapter 74 obtained by breaking of ships etc. The appellants had filed the declaration declaring the said goods as waste and scrap of copper by the sub-heading 7404.00. Technically speaking, the appellants should have filed a fresh declaration indicating a separate heading with the introduction of new Tariff Entry with effect from 16-3-1995. But the question is whether the same should result in denial of the substantive benefit of which the appellants are otherwise entitled. The answer to the question mentioned above, in my view, is that the appellants should not be deprived of the benefit of the Modvat credit, when admittedly a declaration was already on record with effect from 1994, covering the copper goods in question and it was only that the change of the same very inputs from one sub-heading to another sub-heading, which required the appellants to file a fresh declaration. In any case, I also note that the appellants have, within 3½ months period, filed a fresh declaration indicating a separate Tariff heading, which the Assistant Commissioner was empowered to consider and condone the delay in filing the declaration. There is no dispute, about the fact that the appellants had received the inputs and used the same in the manufacture of their final product and have fulfilled the other requisite basic conditions of availment of Modvat credit. In this view of the matter, I am of the view that the impugned Orders are not sustainable. The same are accordingly set aside and the appeal is allowed with consequential reliefs, if any. Stay Petition also gets disposed of.

Equivalent 2001 (135) ELT 0929 (Tri. - Kolkata)