Custom, Excise & Service Tax Tribunal
C.C.E., Jaipur I vs K.L.Engineering (India) Ltd on 27 September, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. III
Date of Hearing/decision: 27.09.2013
Appeal No. E/2315/2006- EX[SM]
[Arising out of Order-In-Appeal No. 112(MPM)/CE/JPR-I/2006, dt.10.04.2006, Passed by Commissioner (Appeals-I), Central Excise, Jaipur-I]
For approval and signature:
Honble Sh. Rakesh Kumar, Technical Member
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3
Whether Their Lordships wish to see the fair copy of the Order?
4
Whether Order is to be circulated to the Departmental authorities?
C.C.E., Jaipur I Appellants
Vs.
K.L.Engineering (India) Ltd. Respondent
Appearance:
Sh.P.K.Sharma, AR - for the Appellants Sh. Jitin Singhal, Advocate- for the Respondent CORAM:
Hon'ble Sh.Rakesh Kumar Member (Technical) FINAL ORDER NO:- 57884 /2013 PER RAKESH KUMAR:-
The respondents are engaged in manufacture of cement plant machinery and steel tank chargeable to Central Excise duty. On 15.11.04, they took Cenvat Credit of Rs.1,55,324/- in respect of certain imported inputs on the basis of Bill of entry dt.01.11.04. The Bill of entry was in the name of M/s. Humboldt Weldog India Pvt. Ltd., New Delhi who had imported those inputs. However, as stated by the Commissioner(Appeals) in para 6 of the impugned order, this Bill of entry was endorsed in the name of respondents on sale of the imported goods to them. There is no dispute that goods covered under the Bill of entry dt. 01.11.04 in respect of which the Cenvat Credit has been taken, had been received in the respondent factory and used for manufacture. The only point of dispute is as to whether Cenvat Credit can be availed by a manufacturer on the basis of Bill of entry which is not in the name of manufacturer but in the name of somebody else who had sold the goods and endorsed the Bill of entry to the manufacturer. The Department was of the view that merely on the basis of endorsement, the respondent would not become eligible for Cenvat Credit and on this basis, the Assistant Commissioner vide order-in-original dt. 12.01.06 confirmed the above mentioned Cenvat Credit demand along with interest and imposed penalty of 10,000/- on the respondent. On appeal being filed to Commissioner (Appeals) against this order, the Commissioner (Appeals) vide order-in-appeal dt. 29.03.06 allowed the appeal by relying upon the judgment of the Tribunal in case of Superlax India Pvt. Ltd. reported in 1997 (94)ELT 144 wherein it was held that a Bill of entry endorsed by an importer in favour of a manufacturer is a valid duty paying for taking modvat credit by the manufacturer and that modvat credit of additional custom duty paid can be taken on the strength of endorsed Bill of entry. The Revenue has filed appeal against this order of the Commissioner (Appeals) mainly relying upon the judgment of Larger Bench of the Tribunal in case of M/s. Balmer Lawrie & Co. Ltd., Vs. CCE, Kanpur, reported in 2000(116) ELT-(364) wherein it was held that during period w.e.f. 01.04.94, an invoice which is issued by a manufacturer in the name of a person and it merely contains an endorsement by that person in favour of another manufacturer, is not a valid document for taking Cenvat Credit by the other manufacture in whose favour the invoice is endorsed, as in term of the Provisions of the Rules, it is only an invoice issued by manufacturer or a registered dealer which is a valid document for Cenvat Credit and endorsement by a person on the invoice issued by the manufacturer can not substitute the invoice issued by a person authorised to issue the same- a manufacturer or a registered dealer and would not be a valid document for Cenvat Credit. The Revenues appeal also relies upon the statutory provisions of Cenvat Credit Rules during the period of dispute according to which the Cenvat Credit could be taken only on the basis of invoice or Bill of entry which is in the name of manufacturer.
2. Heard both the sides.
3. Sh. P.K.Sharma, learned counsel for the appellant, assailed the impugned order by reiterating the findings of the Commissioner (Appeals) and emphasized that the issue involved in this case stands decided in Departments favour by Larger Bench of the Tribunal in case of M/s. Balmer Lawrie & Co. Ltd.(Supra) that when according to Rule 9(1) of the Cenvat Credit Rules, valid documents for taking Cenvat Credit are invoice issued by the manufacturer or registered dealer or a Bill of entry under which goods have been imported by the manufacturer, a Bill of entry, in respect of import made by a person other than manufacture and which merely bears an endorsement in favour of the manufacturer, would not be valid document for taking Cenvat Credit by the manufacturer, as there is no provision in Rule 9(1) for taking of Credit on the basis of endorsed Bill or entry on endorsed invoice. He, therefore, pleaded that the impugned order is not correct. He also pleaded that the Larger Bench judgment referred to in the Revenues appeal is based on Apex Courts judgment in case of Uttar Pradesh Vs. Dr. Vijay Anand Maharaj, AIR 1963 (S.C.) 946 where in it was held that what is not permissible under the statutory rules, can not be held to be permissible by the Tribunal by stretching the wordings of the circular of the Board. He, therefore, pleaded that impugned order of the Commissioner (Appeals) is not correct.
4. Sh. Jatin Singhal, learned counsel for the respondent, pleaded that there is no dispute that the inputs imported by M/s. Humboldt Weldog India Pvt. Ltd. on which the additional custom duty had been paid had been sold to the Respondent and that the Bill of entry had been endorsed in favour of the Respondent, that there is no dispute that the goods, in question, covered by the Bill of entry were received in the factory of the respondent and had been used for manufacture, that the only basis of Revenues appeal is that Bill of entry which had been endorsed by the importer in favour of the Respondent is not a valid document for taking Cenvat Credit and in this regard the Department relies upon the Larger Bench judgment of the Tribunal in case of M/s. Balmer Lawrie & Co. Ltd.(Supra), that this judgment of Larger Bench was considered by Honble Gujrat High Court in case of Vimal Enterprises Vs. Union of India, reported in 2006(195) ELT-267 (Guj.) wherein Honble High Court while considering the question as to whether an invoice which is not in the name of a manufacturer but has been endorsed in his favour is a valid document for Cenvat Credit or not, has decided this question in favour of the assessee and in para 18 & 19 has observed that the Larger Bench judgment of the Tribunal in case of M/s. Balmer Lawrie & Co. Ltd. has failed to assign any reason for drawing such inference except for stating the object with which the amendment has been brought about, that Honble Bombay High Court in case of Marmagoa Steel Ltd., Vs. Union of India, reported in 2005(193) ELT-82(Bom.) after taking note of the decision of the Larger Bench in case of M/s. Balmer Lawrie & Co. Ltd.(Supra) held that a Bill of entry, which is not even endorsed, valid document for Modvat Credit and that in view of this, there is no merit in the Revenues Appeal.
5. I have considered the submissions from both the sides and perused the records. The fact of the case as stated in the impugned order are not disputed. The good imported by M/s. Humboldt Weldog India Pvt. Ltd., New Delhi under the Bill of entry, in question, filed by them had been sold by them to the respondent and had been received in their factory for manufacture and the Bill of entry filed by M/s. Humboldt Weldog India Pvt. Ltd., New Delhi, under which the goods had been cleared from customs, has been endorsed in favour of the respondent. The only point of the dispute is as to whether the Bill of entry which is not in the name of the appellant but is in the name of M/s. Humboldt Weldog India Pvt. Ltd., and has been endorsed by them in favour of the respondent, is a valid document for taking Cenvat Credit by the Respondent. In case of M/s. Balmer Lawrie & Co. Ltd. decided by Larger Bench of the Tribunal referred to in the Revenues Appeal, there was a similar dispute as to whether an invoice issued by a manufacturer X to a dealer who endorses the same to another manufacturer Y is a valid document for availment of Cenvat Credit by Y and the Larger Bench decided that such an endorsed invoice is not a valid document for availment of Cenvat Credit by Y, as mere endorsement is not a substitute for issue of invoice by the person who is authorised to issue the same. This judgment has been considered by Honble Gujrat High Court in case of Vimal Enterprises Vs. Union of India, reported in 2006(195) ELT 267 (Guj.) and Honble High Court after discussing this judgment has taken a different view.
6. I find that Honble Bombay High Court in case of Marmagoa Steel Ltd. Vs. Union of India (Supra) considered the following question of law:
Whether the Tribunal was justified in holding that the appellant has wrongly availed credit of duty under Rule 57G of Central Excise Rules, 1944 as the Bill of entry produced by the appellant were not endorsed in the name of the appellant, even though the appellant had established that the inputs received in the factory of the appellant were the duty paid goods under the said Bill of entry and that the original imported had not claimed credit of duty on the said goods. In this judgment Honble Bombay High Court after considering the above mentioned judgment of Larger bench of the Tribunal has in para 10 of the judgment held that since Rule 57G of the Central Excise Rules, 1944 did not require that Bill of entry should be in the name of the person claiming credit of duty and there was no provision regarding endorsement of the Bill of entry, Modvat Credit on the basis of such bill of entry can not be denied.
7. In my view the judgment of the Honble Bombay High Court in case of M/s Marmagoa Steel Ltd. is squarely applicable to the facts of this case. Moreover Honble Gujrat High Court also in its judgment in case of Vimal Enterprises (Supra) has after discussing the Tribunals judgment, has taken a contrary view. In view of this I do not find any merit in the Revenues Appeal. The same is dismissed.
(Order dictated in the open court) (Rakesh Kumar) Member (Technical) S.Kaur 1