ORDER
P.C. Jain, Member (T)
1. Several issues relating to Modvat credit are involved in this appeal. These are dealt with seriatem below :-
1.1 Lower authorities have denied Modvat credit of duty paid on inputs to the extent of duty paid on ‘packing and forwarding charges’ in relation to the inputs brought in by the appellants in their factory. Reason for disallowing Modvat credit to the above extent is that the ‘packing and forwarding charges’ have been collected selectively by the input supplier as is apparent from the fact that these are shown separately in the invoice and are not part of the price of the inputs. From this it has been inferred by the lower authorities that ‘packing’ is not a normal feature of the inputs.
1.2 Ld. Advocate Sh. M.P. Devnath has stated that duty paid on inputs is allowed as Modvat: credit. ‘Packing and forwarding charges’ are as much part of the price of inputs as any other element, say the basic price of inputs.
1.3 Ld. JDR hats reiterated the reason of lower authorities already set out above.
1.4 I have carefully considered the pleas of both sides. Inputs received by the appellants have suffered duty including the price/cost of packing and forwarding charges. Rule 57A envisages giving Modvat credit of duty paid on inputs received by a Modvat assessee for utilisation thereof in manufacture of finished/final excisable goods. Authorities below have no power to disallow part of duty paid on inputs as Modvat credit on the ground that such duty was not payable or was not a normal feature of the inputs. Further, it would mean that the Central Excise! authorities having jurisdiction over the manufacturer of final products can challenge the assessment made by Central Excise authorities exercising jurisdiction over input suppliers. Former authorities do not have such jurisdiction. Therefore, I allow the appeal on this issue.
2.1 Modvat credit of Rs. 1,700/- on invoice addressed to Union Carbide India with the address of the appellants factory at Lucknow has been denied on the ground that the invoice bears the name of Union Carbide India and not that of the appellant. This reason advanced, for disallowing Modvat credit is not satisfactory in the absence of any averment that the factory of the appellants was not a unit of the appellants who have changed their name from Union Carbide to the present name. Modvat credit is, therefore, admissible.
3.1 Modvat credit on a certain input has been disallowed on the ground that its brand name/commercial name ‘Unikleen II’ has not been declared under Rule 57G. After having heard both sides, I observe that the ‘chemical name’ and the tariff heading, as declared under Rule 57G, has not been disputed by the Revenue; so long as the tariff heading and the generic chemical name has been declared, no objection can be taken to such a declaration simply because the particular brand of that chemical has been brought as input. Appeal on this issue also is allowed.
4.1 Spares of D.G. sets have been disallowed Modvat credit on the, ground while ‘D.G. sets’ have been specifically set out at explanation to Rule 57Q(1)(c), but ‘spares’ or components thereof have not been mentioned. Ld. Advocate Sh. M.P. Devnath submits that components of all machineries, plants etc. under Rule 57Q(1)(a) are not entitled to Modvat credit under explanation to 57Q(1)(b).
I have given my consideration to the pleas of both sides. ‘D.G. sets’, even though separately mentioned in clause (c) of Explanation to Rule 57Q(1), would have been equally covered by the general definition in clause (a). Consequently, component parts of items covered under clause (a) would fall under clause (b) of the Explanation. Thus, spares or components of D.G. sets would be covered by clause (b) of the Explanation to Rule 57Q(1) as it then existed. Further, the benefit of Modvat credit cannot be denied because the declaration -has been filed well within a period of one month of the receipt of the capital goods and the credit has been taken only after filing the declaration of the capital goods and not before that date. Question of showing sufficient cause for late filing of the declaration arises only when it is filed later than the period of one month. In any case, it is a minor procedural lapse, if at all it can be said to be one, for which substantive benefit of Modvat credit should not be denied.
5.1 Thus, appeal of the appellants herein is allowed so far as admis-sibility of Modvat credit on various counts is concerned. In the circumstances, question of imposition of penalty does not arise.
6.1 Appeal is thus allowed with consequential relief to the appellants.