1994 (3) TMI 253 - AT - Central Excise

Appeal allowed for Money Credit Scheme benefit despite procedural irregularity.

SRI KRISHNA VANASPATHI PRODUCTS Versus COLLECTOR OF C. EX., COIMBATORE

SRI KRISHNA VANASPATHI PRODUCTS Versus COLLECTOR OF C. EX., COIMBATORE - 1995 (80) E.L.T. 416 (Tribunal) Issues Involved:1. Applicability of the Money Credit Scheme under Rule 57K of the Central Excises and Salt Act, 1944.2. Requirement of filing a fresh declaration under Notification 45/89 after the rescission of Notification 27/87.3. Interpretation of procedural compliance under Rule 57-O for availing credit.Detailed Analysis:1. Applicability of the Money Credit Scheme under Rule 57K:The appellants, manufacturers of Vanaspathi, availed the Money Credit Scheme under Rule 57K, read with Notification 27/87 and Notification 45/89. The credit taken by the appellants for the period from 11-10-1989 to 2-11-1989 was disallowed by the Assistant Collector of Central Excise, Erode. This decision was upheld by the Collector of Central Excise (Appeals), Trichy. The appellants argued that the scheme was continuous, and the rescission of Notification 27/87 and the introduction of Notification 45/89 did not necessitate a new declaration since the inputs and outputs remained unchanged.2. Requirement of Filing a Fresh Declaration under Notification 45/89:The core issue was whether the appellants needed to file a fresh declaration under Notification 45/89 to avail of the Money Credit Scheme. The appellants contended that the earlier declaration under Notification 27/87 should suffice, as there was no change in the description of inputs or the final product. The Department argued that a fresh declaration was mandatory under Rule 57-O, and the absence of such a declaration invalidated the credit taken.3. Interpretation of Procedural Compliance under Rule 57-O:The Tribunal's decision was split. One member opined that the non-filing of a fresh declaration was a technical breach, as the earlier declaration contained all necessary details. This member emphasized that the purpose of the declaration was to verify eligibility, and since the inputs and outputs were unchanged, substantial compliance had been achieved. The other member held that filing a declaration was a statutory requirement, not merely procedural, and the absence of a fresh declaration invalidated the credit.Separate Judgments:Majority Decision:The majority decision, influenced by the third member's interpretation, concluded that the appellants were entitled to the benefit of the Money Credit Scheme. The decision was based on the Central Board of Excise & Customs' clarification that a fresh declaration was unnecessary if the inputs and final products remained unchanged. The earlier declaration under Notification 27/87 was deemed valid, and the non-filing of a new declaration was considered a technical irregularity, not affecting the appellants' eligibility for credit.Dissenting Opinion:The dissenting member argued that the filing of a declaration was a mandatory statutory requirement under Rule 57-O. The earlier declaration ceased to have legal force after the rescission of Notification 27/87. A fresh declaration under Notification 45/89 was necessary to inform the authorities and enable verification of eligibility. The absence of such a declaration meant the appellants were not entitled to the credit.Final Order:In view of the majority decision, the appeal was allowed, and the appellants were entitled to the benefit of the Money Credit Scheme under Notification 45/89. The non-filing of a fresh declaration was treated as a curable procedural irregularity, not affecting the appellants' substantive rights.