ORDER
K.S. Venkataramani, Member (T)
1. This is an appeal against the order dated 30-4-1987 passed by the Collector of Central Excise (Appeals), Madras, by which he had upheld the order dated 27-11-1986 passed by the Assistant Collector of Central Excise, Kottayam Division, denying MODVAT credit facility to the appellants on some of their inputs for the manufacture of their final product.
2. The appellants manufacture among other things Switch Gear equipment and were availing of MODVAT facility under Chapter V AA of the Central Excise Rules, 1944. On verification of the accounts maintained relating to the MODVAT credit availed viz. R.G. 23 Pt. II Register with the corresponding duty paid documents for the period from 1-3-1986 to 31-7-1986, it was seen by the officers of the Department that the appellants had taken credit in the Register under MODVAT Scheme in respect of certain inputs which were not included in the list of inputs declared for the purpose of MODVAT credit under Rule 57G of the Central Excise Rules by the appellants. Thereupon a Show Cause Notice was issued as to why the inadmissible credit should not be disallowed and as to why duty of Rs. 3,02,585.90 should not be recovered from them which had been erroneously taken into credit and utilised by the appellants under Rule 9(2) read with Section 11A of the Central Excises & Salt Act, 1944. The Assistant Collector on consideration of their defence disallowed the credit and confirmed the demand. The Assistant Collector’s order was upheld in appeal.
3. Shri Dominic, the learned Counsel appearing for the appellants, submitted that the denial of the MODVAT credit to the appellants was incorrect. He pointed out that for example, the last item in their declaration given for MODVAT purposes was vacuum bottle and breakers which was an imported input. They had imported the item by paying countervailing duty on them as vacuum bottle and breaker. They had imported it in CKD and SKD condition. Merely because the names of the components were not written separately, the learned Counsel urged, the appellants should not be denied the benefit of MODVAT credit so long as it is admitted that the vacuum bottle and breakers are inputs in the manufacture of switchgear. He further contended that the appellants had in their declaration given the broad description of the input as vacuum bottle and breakers, and that so long as these are admittedly inputs yet in the manufacture of the finished product, the Department ought to have considered it as a substantial compliance with the requirement of declaration and allowed the credit.
4. Shri K.K. Bhatia, the learned S.D.R. arguing for the Department contended that the requirement of Rule 57G relating to declaration for MODVAT purposes is very clear. It requires the detailed description of the input as well as the finished product along with the sub-heading and heading of the Central Excise Tariff Act. Since the appellants had failed to do so in their declaration, merely giving broad description of input will not meet the purposes of the MODVAT declaration.
4. On a careful consideration of the submissions made by the learned Counsel and the learned S.D.R., it is seen that in this case the appellants had given a very broad description of the input in the case of the input at S.No. 85 of their declaration as vacuum bottle and breakers’. Their argument is that such description would suffice for availing of MODVAT credit because on the basis of such description only they have paid countervailing duty on these items which are imported inputs. The related Bill of Entry is available in the records showing the import of these items. On a perusal of this Bill of Entry, passed through the Cochin Custom House, it is seen that the items, although declared as components for breaker, with a combined value, had in fact been split up for the purposes of assessment under various individual headings as Hydraulic Pipe connector, Double unions, and Nuts, and assessed to duty on merits. Therefore this argument of the appellants is unsupported by the actual Bill of Entry showing by the assessment of the imported inputs. Further, it is seen that Rule 57G of the Central Excise Rules, 1944 lays down the procedure to be observed by the manufacturer, and requires every manufacturer intending to take credit of the duty paid on inputs under Rule 57A to file a declaration with the jurisdictional Assistant Collector, indicating the description of the final products manufactured in his factory, and the inputs intended to be used in each of the said final product. We also note that the proforma for declaration to be filed under Rule 57G also has specific columns for the description of the final product and its Tariff classification, as well as description of the inputs and its Tariff classfication, besides the column to indicate the nature of the input, whether raw material or component etc. When such is the legal position, and such is the requirement of the proforma for the declaration prescribed for the purpose, the contention of the appellants that broad description of the inputs will suffice for the purpose of availing MODVAT credit, is not tenable. In this view of the matter, we find no substance in the appeal which is accordingly rejected.