HOROLOGICAL COMPONENTS Vs. CCE CHANDIGARH

JUDGEMENT

(1.) THE appellant is the manufacturer of watch components, meter parts and quartz clock parts falling under chapters 91 and 92 of the Schedule to the Central Excise Tariff Act, 1985. They were availing modvat credit on the inputs in terms of the provision of the Rule 57 A of the Central Excise Rules, 1944. They had filed a declaration dated 13.9.93 with the concerned central excise authority inter alia declaring free cutting stainless steel rods falling under sub heading 7222.20 as one of the inputs for the purpose of availing modvat credit. They availed credit amounting to Rs. 18,276/ - on this input on 23.4.94. However, the proceedings were initiated against them on the grounds that they had taken the modvat credit of the aforesaid amount without filing declaration in respect of this item. After considering submission made by the party, the Assistant Commissioner of Central Excise, Shimla vide his order dated 1.12.95 confirmed the demand of Rs. 18,276/ - on the appellants.

(2.) THE appellants filed an appeal against the above order but the same was dismissed by Commissioner (Appeals), Chandigarh vide his Order 13.6.2000 upholding the finding arrived at by the original authority. The present appeal is against the above order of Commissioner (Appeals). The matter is listed today for hearing the stay petition filed by the appellants. Since the matter lies in a small premise, I grant waiver of the pre deposit of duty to the appellants and take up their appeal for final disposal with the consent of both the sides. Shri Vinod K. Sharma, Advocate appearing for the appellants contested the finding of the Assistant Commissioner and contended that the appellants had already filed the declaration dated 13.9.93 in respect of the impugned items, the fact relating to which is recorded in para -2 of the order -in -original. He submits that in that declaration, the item stainless steel rods is classified by them under heading 72.20 instead of 72.22 which is the correct classification for this item. He submits that the credit taken by them on 23.4.94 is covered by their declaration dated 13.9.93, since it is well settled that mention of a wrong classification in the declaration cannot debar an assessee from availing the modvat credit on the inputs which is their substantive right. nevertheless, the Ld. consultant submits that the credit on the impugned item was taken by them on 23.4.94 and the declaration was again filed on 27.4.94. He submitted that though they had taken the credit, but the same was utilised only after the dated acknowledgement of the declaration was received by them. In any case it is contended that under Rule 57 G(5), there is provision for condonation of delay in case of late submission of the declaration which is also mentioned in the discussions and findings portion of the order -in -Original. In view of these provisions, the Assistant Commissioner should have condoned the delay of a few days in filing the declaration instead of initiating the proceedings against them. Shri A.K. Jain, Ld. JDR reitrates the findings arrived at the both the lower authorities.

(3.) I have considered the submissions made before me. The facts as stated above are not in dispute. The appellants availed modvat credit amounting to Rs. 18,276/ - on the inputs stainless steel rods on 23.4.94 and they filed the declaration in respect of this input on 27.4.94. The modvat credit is denied to them for violation of the provisions of Rules 57G(2). As rightly contended by the Ld. counsel for the appellants, the Assistant Commissioner is his order has himself stated that there is a specific provision under Rule 57G(5) for condonation of delay in case of late submission of the declaration. He however, has observed that party did not apply for the condonation of delay which led to the denial of the modvat credit to them. This is the only ground on which the modvat credit has been denied to the appellants. It is observed that even if the party had not applied for condonation of delay in filing the declaration, since admittedly there is a provision under the rules for condonation of such delay, they should have been advised to apply for condonation instead of issuing a notice to them. I am of the view that this course of action is wholy un -called for and condone the delay in filing the declaration in view of the facts and circumstances of the case. The appeal is thus allowed with consequential relief, if any, to party.