CCE Vs. STEEL STRIPS AND WHEELS LTD.

JUDGEMENT

(1.) I have heard both sides.

(2.) Learned D.R. strongly pleads that credit of Rs. 14,503/ - is sought to be denied because the inputs in question did not figure in the declaration made by the respondents under modvat procedure. It has been fairly conceded by the learned D.R. that there is no allegation that the said inputs were not duty paid or have not been utilised in accordance with the provisions. The case of Kamakhya Steels (P) Ltd. v. CCE, Meerut reported in 2000 (40) RLT -575, relied upon by the Commissioner (appeals), relates to entirely different facts. In that case, concession was granted on the ground that new items and become eligible for the credit. In this case, items were permitted for modvat credit under the rules and the respondents falied to properly declare them in the relevant declaration. It is not the case of the respondents that they have made such declaration. Therefore, it is pleaded that, the credit to the extent of Rs. 14,503/ - has wrongly been allowed by the Commissioner (appeals) and the order deserves to be set aside. The learned D.R. also cited the ratio of law laid down in the case of CCE, New Delhi v. Avis Electronics Pvt. Ltd. and Ors. reported in 2000 (37) RLT -501 (CEGAT -Larger Bench), in support of her argument that filing of declaration is not merely a technical formality but it is an essential requirement.

(3.) I am of the view that, filing declaration is one of the step in the entire process of availment of modvat credit. But critical aspect of the matter is that, as long as the goods in question are in the category of eligible list (which is not in dispute in this case) and they are of duty paid nature and these are actually used in or in relation to the manufacture of final product, the credit cannot be denied. If the manufacturer missed on the very first step in including these items in the modvat declaration, that cannot render him ineligible for all times to obtain modvat credit, the reason being that the declaration per -se does not entitle the person to obtain such credit and that the admissibility of the credit depends upon the three parameters viz (i) eligibility of the inputs in terms of coverage, (ii) duty paid nature and (iii); their utilisation in or in relation to the manufacture of the final products. Since substantial part of the procedure is satified, I find that, the prayer for disallowing the credit is weak. Therefore, I hold that, the appeal filed by the Revenue deserves to be dismissed and, accordingly, it is dismissed. (Pronounced in open Court.)