Customs, Excise and Gold Tribunal - Delhi
Shiva Stampings Pvt. Ltd. vs Commissioner Of Central Excise on 11 June, 1997
Equivalent citations: 1998(97)ELT327(TRI-DEL)
ORDER Lajja Ram, Member (T)
1. In this appeal filed by M/s. Shiva Stampings Pvt. Ltd., Jaipur, the matter relates to the availment of Modvat credit in respect of the imported steel sheets on the strength of the certificates issued by the concerned Superintendent of Central Excise. The goods were imported by the importers and were sold on high re-sale basis to the traders. These traders under their bills sold the goods to different customers including the present appellants. On receipt of the goods on the strength of the bills, the appellants took Modvat credit. Subsequently, the requisite certificate from the concerned Superintendent of Central Excise was obtained and the credit was utilised after the date of such certificate. It was alleged in the show cause notice that the imported goods have not been received by the appellants under the cover of the certificate and in such circumstances, there was a clear violation of the provisions of Rule 57G(2) of the Central Excise Rules, 1944. The appellants had pleaded that they had not utilised the credit before the date of the certificate and that the Central Board of Excise & Customs had relaxed the provisions of Rules 57G(2) of the Rules and had allowed the assessees to take credit and even to utilise the goods prior to the receipt of the duty paying documents, but the utilisation of the credit had to await the receipt of the proper duty paying documents. The Collector of Central Excise (Appeals) had held that the certificates in this case issued subsequently by the Superintendent of Central Excise were not the relevant duty paying documents and the inputs were received by the assessee without the cover of duty paying documents.
2. I have heard Shri Pankaj Mallick, C.A. for the appellants and Shri D.K. Nair, JDR, for the respondents/Revenue.
3. Shri Pankaj Mallick, C.A., submitted that the procedure for issue of subsidiary certificate against Bill of Entry had been prescribed by the Delhi Collectorate Trade Notice No. 17/87, dated 5-3-1987 and that they have taken the credit on the strength of the bills, but utilised the same only after the certificate was issued by the Superintendent of Central Excise in terms of the Trade Notice, referred to above. He also submitted that the Central Board of Excise & Customs under letter No. D-21/4/87-TRU, dated 15-4-1987 had permitted making of suitable entry in RG 23, Part I, even before the duty paying documents are received. It had been provided therein that the credit was to be allowed only after the receipt of the duty paying documents. He submitted that they had utilised the credit only after the issue of the certificates by the Superintendent of Central Excise. In this contention, he referred to the Tribunal's decision in the case of C.C.E. v. Amal Rasayan Ltd. - 1993 (68) E.L.T. 446 (Tribunal).
4. In reply, Shri D.K. Nair, JDR, submitted that these instructions were in the context of hold up of traffic and that in this case the goods had been received without the cover of the duty paying documents and that the view taken by the adjudicating authority and the appellate authority was correct.
5. I have carefully considered the matter. In Para 6 of their order in the case of C.C.E. v. Amal Rasayan Ltd. -1993 (68) E.L.T. 446 (Tribunal), the Tribunal had observed as under :
6. Going by the wording of Sub-rule (2) of Rule 57G, there is nothing to indicate that the documents should necessarily accompany the inputs. What it provides is that the inputs received have to be under the cover of the duty paying documents specified in the said rule. Going by the wording of Sub-rule (2) of Rule 57G assumed inclusion of the words "should accompany the inputs when received" does not appear to be ex facie justified. Significantly the CBEC has vide its letter No. D-21/4/87-TRU, dated 15-4-1987 permitted making of suitable entry in RG 23A Part I even before the documents are received but has specified that Modvat credit could be allowed, only after receipt of the duty paying documents. This indicates that even the Board has envisaged receipt of documents at a later stage.
It is seen that the Central Board of Excise & Customs had permitted making of the suitable entry in RG 23A, Part I, even before the duty paying documents are received by the manufacturer availing of the benefit of the Modvat provisions.
6. In this case, there is no dispute that the credit was utilised only after the requisite certificate have been issued by the concerned Superintendent of Central Excise. There is no allegation in this case that the inputs were not received or were not utilised or that no duty had been paid when the inputs were imported. In this connection, after going through the Delhi Collectorate's Trade Notice No. 17/87, dated 5-3-19871 find that in Para 3 of the said Trade Notice it had been provided that the importer shall make a declaration on all copies of the Bill of Entry at the time of importation of the goods that Modvat credit would be taken in respect of the countervailing duty paid and that he intends to avail of the facility of the subsidiary certificate. I do not find any such declaration on the copies of the Bill of Entries on record. It is, however, a fact that the certificate had been issued by the concerned Superintendent of Central Excise and it has to be assumed that before issuing the certificate, he was satisfied about the genuineness of the documents and the eligibilty for the Modvat credit.
7. As there was no allegation about the mis-utilisation of the credit, I consider that the demand of duty in this case was not proper. However, it is also a fact that all the requirements of the Trade Notice relied upon by the appellants had not been complied with and that the goods have moved under the cover of the Bills on which there was no reference to the import documents. In view of these irregularities I consider that the imposition of penalty of Rs. 5,000/- was justified and I confirm that part of the order which relates to the imposition of penalty.
8. In view of above discussion, the appeal is allowed in so far as the demand of duty is concerned. The penalty of Rs. 5,000/- is confirmed. Ordered accordingly.