Circular No. 219/53/96-Central Excise
Government of India
Ministry of Finance
Department of Revenue, New Delhi
Subject: Denial of Modvat credit on duty paid inputs owing to the variation of classification upto six-digit level- Regarding
Under the provisions of rule 57G of the Central Excise Rules, 1944 any manufacturer of the excisable goods intending to avail of the credit of duty paid on inputs of the excisable goods intending to avail of the credit of duty paid on inputs in required to file a declaration in the prescribed form giving complete description of the inputs and the final product that he intends to manufacture.
2. It has been brought to the notice of the Board that Central Excise field formations are denying Modvat credit on the ground of variation of classification of inputs upto six-digit level. It has been represented that owing lack of uniformity in classification of various products throughout the country, Modvat credit should not be denied in the case of minor changes in the description/ sub-heading no. as long as the description of the product is correctly indicated in the declaration.
3. The matter has been examined by the Board and I am directed to say that credit of duty paid on input should be allowed as long as the description of the inputs and the Chapter No. indicated in the declaration under the provisions of rule 57G is correct. Credit should not be denied on the ground of minor variations in the classification of the inputs upto the six-digit level, or in the event of change in Chapter heading given in the declaration, due to change in the practice of classification which does not affect the rate of duty.
