KERALA STATE ELECTRONICS DEVEP CORPN LTD Vs. COLLECTOR OF C EX

JUDGEMENT

(1.) THIS appeal is directed against the order of the Collector of Central Excise (Appeals), Madras, dated 29th April, 1988 confirming the order of the Asstt. Collector of Central Excise, Trivandrum, dated 5-9-1.987 and directing the appellant to reverse the credit in respect of which the appellant has been found to have taken erroneous Modvat credit. The appellant is manufacturing sophisticated electronic items and had filed a declaration in terms of Rule 57G of the Central Excise Rules, 1944 on 24-3-1986 before the Department for taking Modvat credit in respect of the various inputs specified therein. Proceedings were instituted against the appellant by issue of a show cause notice by the Asstt. Collector on 5-3-1987 on an allegation that the inputs specified in the declaration were not in terms of Rule 57G and the proceedings ultimately resulted in an order that the appellant had availed erroneous Modvat credit without a proper declaration as per Rules and the order of the original authority in regard to the same was upheld by the lower appellate authority under the impugned order out of which the present appeal arises.

(2.) Shri Sashidharan, the learned Counsel for the appellant submitted that the appellant filed a declaration in terms of Rule 57G in respect of the inputs on 24-3-1986 and subsequently filed a detailed and specific declaration in regard to the same inputs, as desired by the Department, on 16-12-1986. The appellant availed Modvat credit in respect of the duty suffered by the inputs on 18-12-1986. It was urged that the authorities below denied the appellant the benefit of Modvat credit on the ground that the appellant had received the goods prior to the filing of the specific declaration, dated 16-12-1986 and so would not be covered by Rule 57G of the Central Excise Rules, 1944 for availing of Modvat credit. The learned Counsel contended that a proper construction of Rule 57G would bear out that receipt of inputs has nothing to do whatsoever with the filing of declaration and admittedly the appellant had availed of Modvat credit only on 18-12-1986 after having filed a specific and detailed declaration in regard to the inputs on 16-12-1986 itself and obtained a dated acknowledgment on 16-12-1986. The learned Counsel, therefore, submitted that under the Scheme of Modvat if the inputs received by the appellant are covered by proper declaration, though subsequent to the receipt of the inputs and if the appellant had not taken any credit at all prior to the filing of the declaration, the appellant would be entitled to take Modvat credit notwithstanding the fact that the inputs had been received prior to the filing of the declaration. The learned Counsel submitted that the appellant had actually taken credit in the RG 23 Part II in respect of the inputs in question only on 18-12-1986 that is, subsequent to the filing of the specific declaration. It was, therefore, submitted that the view taken by the authorities in denying the appellant the benefit of Modvat credit is not correct under law. The learned Counsel also placed reliance on the ratio of the ruling of the Bench of this Tribunal in the case of 'Clean Foods Corporation v. Collr. of C. Ex., Hyderabad reported in 1990 (47) ELT 137 (Tri.)' (Order No. 257/89 in E/Appeal No. 317/88, dated 22-5-1989).

(3.) WE have carefully considered the submissions made before us and the short question that arises for our consideration in the present appeal is whether in terms of Rule 570 the credit taken by the appellant in respect of the inputs in question is in order or not. It is not disputed that the appellant had filed a specific declaration in regard to the nature of the input received by the appellant and obtained a dated acknowledgement from the authorities in terms of Rule 57G on 16-12-1986. It is only subsequent to the declaration of 16-12-1986 the appellant has taken credit in RG 23 Part II on 18-12-1986. As a matter of fact the original authority in his order in this context has observed as under. -