ORDER
Jyoti Balasundaram, Member (J)
1. Modvat credit of Rs. 23,140 (BED) plus Rs. 3,471 (SED) has been denied to the appellants under Rule 57-1 of the Central Excise Rules and penalty of Rs. 2,500/- has also been imposed upon them under Rule 173Q on the ground of contravention of the provisions of Rule 57G in as much as, the appellants did not declare Alloy Steel in rounds falling under sub-heading 7228.30 and availed credit on this input for the manufacture of their final products Motor Vehicle parts.
2. The learned Consultant Shri R. Pal Singh draws my attention to the Modvat declaration dated 29-1-1993 and submits that the description (under heading or sub-heading) of Chapter 72 is sufficient to cover the input Alloy Steel rounds and Modvat credit cannot be disallowed for non-observance of the procedural requirement of declaration. In this connection, he cites several orders of the Tribunal including the following :
1991 (56) E.L.T. 456
1994 (72) E.L.T. 908
1994 (74) E.L.T. 339
1995 (78) E.L.T. 578
3. The learned DR Shri Ram Sharan opposes the contention of the learned Consultant pointing out that Alloy steel in rounds has not been declared at all in their declaration and therefore, Modvat has been rightly disallowed. He seeks to distinguish the case law cited on the ground that in those cases, Modvat credit was extended either on the basis that the item for which Modvat credit had been sought to be denied, was akin to some other item which had been declared or on the ground that the description of declared input was wide enough to cover the input not declared.
4. I have carefully considered the rival submissions. There is no dispute that the appellants did not declare the input Alloy Steel rounds in their declaration and the description under heading or sub-heading of Chapter 72, applies to those items specifically declared in their declaration and cannot be taken to include an item not declared at all. It is not the case of the appellants that the input namely Alloy Steel rounds, is similar or identical to any of those items specifically mentioned in the declaration. Even though he submits that the alloy steel rounds are somewhat similar to billets, he has not been able to substantiate this contention and further it is to be noticed that Tariff recognises these as two distinct items classified under two sub-headings. The learned DR is correct in submitting that the case laws cited are not applicable to the facts of this case. In these circumstances, I hold that Modvat credit has been rightly denied and uphold the impugned order to this extent. However, having regard to the totality of the facts and circumstances, I am of the opinion that this is not a fit case for imposing any penalty and hence set aside the penalty imposed upon the appellants. The appeal is disposed of in the above terms.