COLLECTOR OF CENTRAL EXCISE Vs. AAR BEE ENTERPRISES

JUDGEMENT

(1.) NONE for the respondents. The respondent is a manufacturer of Metal Containers. In the manufacture of these metal containers, it uses tin sheets which were being sent for lacquering under Rule 57F(2) of the Central Excise Rules. The Department issued a notice demanding duty on lacquered sheets on the ground that they were used in the manufacture of containers exempted from duty and the demand was confirmed in due course. The Collector (Appeals) confirmed the liability to duty of lacquered tin sheets but observed that since the appellants before him had paid duty on the unlacquered tin sheets, it could avail of the Modvat Credit so earned for paying duty on the lacquered sheets. This is being appealed by the department on the ground that the assessee has not declared the lacquered sheets as an intermediate product from a final production under 57G declaration.

(2.) THE 57G declaration mentions the final product as electrolytic tin plates or tinned sheets. It is clear that the appellant had been all along under the impression that it was entitled to modvat benefit with regard to the lacquered sheets. The Collector's finding that the lacquering was being done after it was permitted under Rule 57F shows that the Department was also of the same view. There are decisions of this Tribunal to the effect that where the assessee did not know at the time of clearance the product would be liable to duty and therefore, did not declare the inputs, take credit on the duty paid on the inputs would be available notwithstanding the failure to make the declaration. That is the position in the present case. The Collector's order is therefore, correct. The appeal is dismissed.