CCE, CHANDIGARH-I Vs. ATUL FASTNERS

JUDGEMENT

(1.) THE respondents are manufacturers of Screws & Rivets of iron and steel. For the purpose of manufacture of such products, they used to send steel rods for wire drawing on job work basis. When they did so, they took Modvat credit of the duty paid on the steel rods. The job workers returned the processed goods (wires drawn from steel rods) to the respondents under cover of challans under Rule 57F(5) of the Central Excise Rules 1944. From a scrutiny of such challans filed with the RT -12 returns of the respondents, the department found that the quantity of steel wires returned by the job workers was less by 3.332 MTs than the original quantity of steel rods which had been sent by the respondents to the job workers. This quantity of 3.332 MTs of material was shown as destroyed, in the challans. The department took the view that the Modvat credit amounting to Rs. 7,737/ - taken by the respondents on this quantity of 3.332 MTs of material should be reversed for want of a declaration that such waste would arise during the course of job work. Therefore, a show cause notice was issued to the respondents, which was contested. The adjudicating authority disallowed the Modvat credit, but the lower appellate authority, in the appeal filed by the assessee, reversed the decision of the adjudicating authority. Hence the present appeal of the Revenue. Heard both sides.

(2.) LD . JDR, Sh. H.C. Verma reiterates the grounds of this appeal. He submits that the respondents had not declared waste in their declaration filed under Rule 57F(4), thereby disentitling themselves to the benefit of Modvat credit. He relies on the decision of the Tribunal's Larger Bench in the case of AVIS Electronics (P) Ltd. ( : 2000 (117) ELT 571) in support of his plea that it was mandatory, for availment of the credit, that the respondents should have declared the steel waste of 3.332 MTs, which was not returned to their factory. When the mandatory requirement was not fulfilled, the appellants were not entitled to the benefit of Modvat credit. Ld. advocate Sh. Praveen Sharma, on the other hand, submits that the issue involved in this case stands squarely covered by this Tribunal's decisions in the cases of Rishi Iron & Steel Ltd. v. CCE, Raipur ( : 1996 (87) ELT 110) and Bharat Radiators Ltd. v. CCE, Mumbai (1999 (112) ELT 918). Ld. counsel also relies on the Board's Circular No. 267/136/87 -CX. 8 dated 15.1.1988. He prays that the impugned order be upheld, following the cited case law.