LAWS(CE)-2001-12-274

LML LTD. Vs. COMMISSIONER OF CENTRAL EXCISE, KANPUR

Decided On December 30, 2001
LML LTD. Appellant
V/S
COMMISSIONER OF CENTRAL EXCISE, KANPUR Respondents

JUDGEMENT

(1.) THESE appeals filed by the assessee are against a common order passed by the Commissioner (Appeals). Modvat credit taken by the appellants on two inputs viz. Heat Sink and Connector during the period December 1997 to February 1998 has been denied by the lower appellate authority on the ground that the Chapter Headings of the goods declared in the Modvat declaration were different from the correct Chapter Headings. In the declaration filed under Rule 57G, the assessee had declared Heat Sink under Chapter Sub -Heading 8714.00 and Connectors under Chapter Sub -Headings 8714.00 and 8548.00. The lower appellate authority observed that the supplier of the goods had mentioned the correct classification of the inputs in their invoices and that the Chapter Headings/Sub -Headings so mentioned in the invoices were different from those declared by the assessee under Rule 57G. In respect of Heat Sink, the classification mentioned in the suppliers' invoices was 7616.90 whereas the assessee's declaration was 8714.00. In respect of Connector, the suppliers' classification as noted in their invoices was 3926.90 whereas the assessee noted the classification differently as 8714.00, 8548.00 etc. in their declaration. The lower appellate authority has denied the Modvat credits taken on these goods on the ground of the aforesaid difference in Chapter Headings/Sub -Heading between the suppliers' invoices and the assessee's declaration. In the present appeals, the appellants have challenged the decision of the Commissioner (Appeals) on the strength of an earlier order -in -Appeal No. 550 - 552/99 dated 10.6.99 passed by the same appellate authority. A copy of the said order -in -appeal has also been placed on record. As per that order, the Commissioner (Appeals) has allowed Modvat credit to the same party on Heat Sink by following CBEC Circular No. 219/ -CX dated 4.6.96.

(2.) I have heard both sides. Ld. Advocate Sh. R. Santhanam for the appellants submits that there is no dispute of the receipt of the inputs and utilization thereof by the appellants in their process of manufacture of final products. The only ground taken by the authorities below for denying the Modvat credits on Heat Sinks and Connector is the discrepancy in Tariff Headings between the modvatable invoices and the appellants' declaration filed under Rule 57G. Ld. counsel submits that the credit could not have been denied on the stated ground inasmuch as the Board's Circular dated 4.6.96, which was correctly followed by the same appellate authority in the earlier case, had clarified that credit should not be denied on the ground of change in Chapter Heading given in the declaration due to change in the practice of classification, which did not affect the rate of duty. In the present case, the Revenue has no case that the rate of duty was not the same under the different Headings for each of the inputs. The inputs were correctly described in the modvatable documents, which has not been disputed by the lower authorities. The only objection raised by the authorities is that Chapter Headings different from those mentioned in the suppliers' invoices were stated in the Modvat declaration. This cannot be a ground for denial of Modvat credit, as per Board's Circular. Ld. Counsel has also relied on final Order No. A/1029/2000 -NB(SM) dated 14.2.2000 passed by this Bench in Appeal No. E/1933/99 -NB(SM) [Saraswati Engg. Ltd. v. CCE, Kanpur].

(3.) LD . JDR Sh. Hitesh Shah submits that the Board's Circular relied on by ld. counsel has no application to the instant case inasmuch as, in this case, what is brought out by the declaration is not a mere change in Chapter Heading but a change in Chapter altogether. The appellants have put the inputs under Chapters which are different from the Chapters under which the goods were placed by the manufacturers thereof. The lower appellate authority has accepted the manufacturers' classification and denied the credits to the appellants on the ground of discrepancy of Chapter Headings. Ld. DR prays for upholding the impugned order.