USHA MARTIN INDUSTRIES LTD Vs. COLLECTOR OF C EX

JUDGEMENT

(1.) THIS appeal is directed against the order dated 24-8-1987 passed by the Collector of Central Excise, Bangalore by which he had ordered reversal of Modvat credit of a sum of Rs. 2,54,629.97, as the Modvat credit was irregularly availed by the appellant. The Central Excise Officers of Bengalore Collectorate Headquarters visited the appellant's factory on 23-9-1986. The appellants are manufacturers of certain types of machinery items in their Bangalore factory. They had filed a declaration for the purpose of Modvat on 27-3-1986 and a further declaration on 22-9-1986 under Rule 57G of the Central Excise Rules, 1944 giving details of the inputs and their finished products. By a letter dated 19-11-1986 they revised the nomenclature of inputs declared by them on 22-9-1986. They filed a further (third) declaration on 17-12- 1986 and 19-12-1986 showing the addition of five more inputs. On a verification of the records the officers found that the appellants had taken Modvat credit on inputs for which they had not filed any declaration under Rule 57G. The main items on which it was alleged that credit had been taken without declaring the inputs were gear wheel, gear boxes, dynodrives motors. The Department therefore, initiated proceedings by a Show Cause Notice for recovery of the MODVAT credit availed of on such inputs and after considering the defence of the appellants, the Collector passed the impugned order.

(2.) Shri R.B. Sinha the learned Consultant appearing for the appellants contended that he was confining the appeal only to the order for reversing the credit on the three main inputs mentioned above although there was another ground in the impugned order regarding availment of credit on compressed oxygen. The learned Consultant urged that what was mentioned as gear wheel in the gate pass is worm gear set; it consists of Worm shaft and Worm wheel. He submitted that copies of the order placed with the supplier and the related invoice as well as the corresponding gate pass which were available on record would show that the order and the invoice were for Worm gear sets. Both gears and gear boxes fall under Heading 84.33 of the CETA 1985. They had initially mentioned Chapter 84 in the declaration on 27-3-1986 and in the revised declaration filed on 22-9-1986 greater details were given. Names of the inputs were fully amplified by that in the amendment submitted on 19-11-1986 mentioning inter alia gears, gear wheel and gear boxes etc. Therefore, the learned Consultant argued that it cannot be said that gears and gear boxes had not been declared. As for the other inputs namely dynodrive, it was contended that this is a type of electrical motor classifiable under Heading 85.01 and that they had mentioned Chapter 85 in their initial declaration filed on 27-3-1986 and they had mentioned Electric Motor specifically under sub-heading 8501.00 in the revised declaration on 22-9-1986. It was further elaborated in their amendment on 19-11-1986 by specifically mentioning dynodrive. Dynodrive, according to the appellant is nothing but Electric motor and it was mentioned that even the Central Board of Excise & Customs had clarified in 1984 to the same effect.

(3.) WE have carefully considered the submissions made by the learned Consultant and the learned S.D.R. There has been in this case initial declaration by the appellants on 27-3-1986 in which they had given broad description of the inputs and the Chapter numbers of the Central Excise Tariff Act, 1985 along with description and Chapter heading and subsequently on 22-9-1986. They had furnished declaration in the prescribed proforma. In this declaration they had indicated under the heading 'description of inputs and its tariff classification' as Gears, couplings etc. Pulleys, blocks, bearing housing and under sub-heading 8483.00. Another input declared in this is Electric motors under sub-heading 8501.00. In the subsequent letter of 19-11-1986 they had put forth the amendment to the nomenclature of the inputs and other fresh items. In this they had expanded the declaration earlier made in respect of Gears and Electric Motors and the following expanded description of the inputs was given:-