ORDER
C.N.B. Nair, Member (T)
1. Credit has been denied in the instant case on timing belt, an input in the manufacture of electric motors, on the ground that the imported consignment described the item as Sewing Motor Belts as against the 57G declaration as timing belt. The classification was also different from the classification filed under the declaration, the declaration having mentioned the classification of Sub-Heading 4010.90 and the Sub-Heading for payment of countervailing duty being 3926.90. A penalty of Rs. 3,000/- has been imposed also.
2. Arguing the appeal for admission, learned Advocate, Shri P. Sharma submits that that the input in question is the declared product remains admitted in the impugned order itself. He refers to para 3 on the first page of the order which is reproduced below:
Briefly stated, the facts of the case are that the appellants are manufacturers of electric motors and are availing credit of duty on inputs under Rule 57A. Vide their declaration dated 9.12.1993. one of the inputs declared by them was ‘Timing Belt’ which they declared under sub-heading 4010.90 and started availing credit of duty paid thereon. They had imported a consignment of such timing belts, which were described in the bill of entry as ‘Sewing Motor Belts’ and classified them under sub-heading 3926.90 for the purposes of CVD. The appellants took credit of additional duty of Customs paid thereon. The lower authority denied the modvat credit on such Sewing Motor Belts amounting to Rs. 36,031.54 on the grounds that they had filed a declaration under Rule 57G only in respect of timing belts filed under sub-heading 4010.90. It was held by the lower authority that two inputs in question i.e. one in respect of which the declaration had been made and one in respect of which credit had been availed, are different from each other and, therefore, in the absence of a declaration, credit was not admissible.
3. Shri Sharma submits that the input is the same as the declared item as timing belt. He also submits that the issue remains settled in favour of the appellants vide Tribunal decision in Etcher Motors Limited v. CC, Indore and many other decisions.
4. Heard Shri T.A. Arunachalam, learned Departmental Representative. He points out that the item declared and the item imported are different. He refers to the last para on page 2 of the order wherein it has been mentioned that a timing belt in an electric motor is used altogether for different purposes than the main sewing motor belt. He also submits that in view of this finding of fact, it cannot be taken that the declaration covered the goods. He also refers to the proforma for declaration of input under 57G which specifically contains requirement for declaring classification of the input. He also submits that the appellants case is covered against him by the decision of the Tribunal in Pratap Universal Machines Pvt. Ltd. v. CCE, Jaipur wherein the Tribunal held that in the absence of correct description of goods and correct chapter Heading, modvat credit is inadmissible. He also referred to decision of the Tribunal in Paro Food Products v. CCE wherein the Tribunal held that the declaration ‘packing materials’ did not cover metal container and, therefore, credit could not be taken on metal container under the declaration of packing materials.
5. I have perused the records of the case and have considered the rival submissions. I find that scope of dispute is extremely narrow and, therefore, the appeal itself can be disposed of at this stage. Accordingly, the appeal itself is disposed of under this order.
6. The requirement under Rule 57C is that the manufacturer shall file a declaration indicating the description of the final products manufactured in its factory and inputs intended to be used in the said final product. In the instant case, the declaration of inputs was made as timing belt. This declaration is based on the function of the component and its classification is bound to change depending upon the material of which the timing belt is made. The appellants, therefore, could not have declared all the classifications in their declaration. There is no dispute that the item is timing belt. The impugned order describes the goods as “a consignment of such timing belt which was described under Bill of Entry as sewing motor belts”. In such a context, the latter mention in the order that timing belt of electric motor is used altogether for different purposes than main sewing motor belt cannot be accepted as a finding of a fact contrary to the claim of the appellants that the goods in-question are timing belts. In the Order-in-Original also, no dispute had been raised that the consignment under import is not a timing belt. In the circumstances, it has to be held that the appellants declaration of timing belt covers timing belts of all types irrespective of the material of make. The appeal is, accordingly, allowed with consequential relief to the appellants and the impugned order is set aside. In view of the differences in facts, the case law cited has to be held as not covering the legal issue involved in this appeal.
(Pronounced and dictated in the open court.)