ORDER
G.R. Sharma, Member (T)
1. The captioned Appeal has been filed by the appellants against the order of Collector (Appeals). The Collector (Appeals) in his order had held:
“In regard to the merits of the case, the fact is that the appellants’ declaration was, ‘all type of marble-stone granite cutting/processing/finishing/polishing machine spares and accessories thereof 8464.00 i.e. slabs/ tiles/polishing/block cutting/champering and engineering, dressing/bridge cutting, splitring, marble wheel cutting, edge cutting, heavy and light marble drill, Engroduty, sper sharper, portable edge cutting machine, single disk cutter and granite and marble gangsaw etc.’ Thus it is very clear that they did not declare the parts of gangsaw falling under sub-heading 8466.00, as their final product. Their contention that the declaration of sub-heading is not required has rightly been rejected by the adjudicating officer, and more importantly, their declaration of the goods falling under sub-heading 8464.00 cannot be stretched to include goods of sub-heading 8466.00.1, therefore, find that the appellants have rightly been held not entitled to utilise, the balance of Modvat credit for payment of duty on parts of gangsaw cleared by them as final product. The appellants reference to the case-law is totally mis-placed since the facts and circumstances of the case-law are entirely different from the facts and circumstances of this case. Though following the rationale of the case-law cited, the appellants argument that the statutory requirement is only to the description of the final product in the declaration and there is no requirement to show the Tariff heading/sub-heading is accepted. The appellants argument that in this case, they had given the full and complete description of the final product so that the parts of the gangsaw falling under Heading 8464.00 can be said to include goods of sub-heading 8466.00, is inadmissible and untenable and also find that the rationale of the case-law referred to by the appellants is not applicable to the specific facts of the present case since the facts of the case are not on all fours with the facts of the present case.
In view of the above discussion, I, therefore, find no merits in the appellants’ contentions warranting any interference with the adjudication order in this case. The appeal is therefore, rejected.”
2. The facts of the case, in brief, are that the appellants are engaged in the manufacture of stone cutting & polishing machinery and parts thereof. They are availing the facility of Modvat credit. They cleared the parts of the Gangsaw classifiable under Chapter sub-heading No. 8466.00 and paid duty on this Gangsaw by debiting an amount of Rs. 39,875/- as basic Excise Duty and Rs. 875/- as Special Excise Duty in RG-23A Part II out of the credit earned by them under Modvat Scheme. The Department alleged that the appellants did not file any declaration in respect of parts of Gangsaw, in their declaration dated 29-10-1990. As show-cause notice was therefore, issued to the appellants asking them to explain as to why the duty amounting to Rs. 40,750/- should not be recovered from them under Rule 57-1 of the Central Excise Rules, 1944 real with Section 11A of the CESA, 1944. After considering the submissions made by the appellants, the Collector confirmed the demand. On appeal, the Collector (Appeals) upheld the order of the Asstt. Collector and hence the Appeal before the Tribunal.
3. Shri A.C. Jain, the learned Advocate appearing for the appellants submitted that the purpose of availing Modvat credit was fully satisfied in cases where the manufacturer disclosed the description of the goods with reference to a number of chapter mentioned in the Central Excise Tariff Act, 1985 that a perusal of Notification No. 177/86-C.E.. issued under Rule 57A will show that Modvat credit is available to goods falling under each and every Heading specified including Chapter 84 under which the final product manufactured by them was classifiable; that non-mention of heading is of no real consequence so long as final products fall in Chapter 84; that if the description declared can be traced or related to any of the specific eligible Chapters, Modvat credit should be allowed; that this was the substantive requirement of Modvat Scheme; that mention of heading or sub-heading is only for the limited purpose of establishing the identity of the product; that non-mention of heading No. should not lead to denial of modvat credit. The learned Counsel cited and relied upon the decision of the Hon’ble Supreme Court reported in JT 1993 (4) SC 163 in the case of Kaka Joginder Singh alias Dharti Pakad v. K.R. Narayanan, Vice President of India. The learned Counsel therefore, submitted that modvat credit facility was a substantive benefit and that substantive benefit cannot be denied on trivial technicalities.
4. Shri R.A. Sheikh, the learned JDR submitted that the declaration filed by the appellants did not describe Gangsaw parts as finial products; that Rule 57G requires that brief description of the goods should be given; that the appellants did not give the brief description nor the correct Chapter Heading “and thus, it was not mere a technicality but a substantive requirement which can be termed as a mandatory requirement. He submitted that the lower authorities have rightly denied them the benefit of Modvat credit.
5. Heard the submissions of both sides. On careful consideration, I find that two rules are relevant in the present case. First is Rule 57A of the Central Excise Rules. This Rule provides that Modvat credit shall be available on specific final products and on specific inputs provided the specific inputs are used in or in relation to the manufacture of the final products. I also observe that Notification No. 177/86 as amended from time to time was issued under Rule 57A. In the Table annexed to this Notification, 3 columns have been provided. Column No. 1 is Serial No., Column No. 2 is of description of inputs and column No. 3 is description of final products. In this Table under Column No. 2 for description of inputs, goods classifiable under any headings of Chapters have been indicated. Similarly under the description of the final products, goods classifiable under any heading of Chapters have been indicated. Thus, for the purpose of Rule 57A, it is sufficient if the correct Chapter Heading of the goods namely, the inputs and the final products is indicated.
6. The second relevant Rule is Rule 57G. Rule 57G provides that every manufacturer intending to take credit of the duty paid under Rule 57A, shall file a declaration with the Asstt. Collector of Central Excise having jurisdiction over his factory, indicating the description of the final products manufactured in his factory and the inputs intended to be used etc. This rule therefore, clearly lays down that description of the inputs and the final products are a mandatory requirement. The word used in this Rule is ‘shall’ and therefore, this is mandatory that the correct description of the goods is given. On careful scrutiny of the declaration filed under Rule 57G of the final products, I find that there is no mention of the gangsaw parts. Thus, there is contravention of Rule 57G.
7. I also observe that even the sub-heading No. for correct identification of the goods has not been correctly furnished inasmuch as the sub-heading furnished for these final products is given as 8464.00 whereas the item falls under Chapter sub-heading 8464.00.1 also observe that the case-law cited and relied upon by the appellants does not help them in view of the fact that neither the description of the final products has been indicated in the declaration filed under Rule 57G nor the Chapter sub-heading has correctly been mentioned so as to establish the identity of the final products. I therefore, hold that in the absence of the correct description of the goods under Rule 57G and the correct Chapter sub-heading being mentioned in the declaration filed under Rule 57A, Modvat credit facility has rightly been denied to the appellants by the lower authorities. In this view of the matter, I do not see any legal infirmity in the impugned order. Accordingly, the impugned order is upheld and the Appeal is rejected.