Customs, Excise and Gold Tribunal - Mumbai
Collector Of Central Excise And Customs vs Amal Rasayan Ltd. on 13 May, 1993
Equivalent citations: 1993ECR543(TRI.-MUMBAI), 1993(68)ELT446(TRI-MUMBAI)
ORDER P.K. Desai, Member (J)
1. Invoking the provisions of Section 35G(I) of the Central Excises and Salt Act, 1944, the Collector of Central Excise & Customs, Vadodara, has sought for reference to the High Court on the issue as formulated by him, pleading the same to be issue of law arising out of this Bench's Order No. 1106-1107/92-WRB, dated 22-7-1992 in appeal E/486/92-Bom.
2. The Respondents were availing MODVAT Credit in respect of certain inputs used in the manufacture of final products. The inputs were being received under duty paying documents. Three Show Cause Notices however came to be served on the Respondents alleging that the original Gate Passes were either not properly endorsed in their name or that the endorsements were not in proper form and as such they were not eligible to get the MODVAT Credit in relation to those inputs. Both the Assistant Collector and Collector (Appeals) came to the conclusion that because of these irregularities noticed in the endorsements, the Respondents were not eligible to get the MODVAT Credit and as such demand raised in relation to irregular availment of MODVAT Credit was confirmed. When the matter came up in appeal before the Tribunal, this Bench vide its aforesaid order came to the conclusion that the defects were rectifiable and the Respondents agreed to rectify the same. This Bench therefore ordered that the Assistant Collector may re-examine the issue and the Respondents may produce the rectified gate passes. The Collector has however filed the present application seeking reference to the High Court on the following issue :-
"Whether MODVAT Credit can be extended to goods which have entered the factory without cover of duty paying documents i.e. properly endorsed Gate passes in this case in contravention of the requirement of Rule 57G(2) of the Central Excise Rules, 1944 by having the defects rectified at a later stage i.e. by getting the appropriate endorsement made thereon much after the receipt of inputs."
3. Heard Shri Arun Tandon, the Ld. SDR, who has submitted that the provisions of Rule 57G(2) of the Rules indicate that the proper duty paying documents ought to accompany the inputs when received and that there was no provision for rectification of defects at a later date so as to entitle the manufacturer to avail of the MODVAT Credit. In his submission, in that case, the view taken by the Tribunal calls for examination and that therefore the question as formulated be referred to the High Court.
4. Shri Willingdon Christian, the Ld. Adv. for the Respondents however, submitted that there is no issue of law arising out of the order of this Bench and that the defect has always been treated as rectifiable.
5. Considering the submissions made, the only issue that is sought to be referred to the High Court is whether in case of immediate non-compliance with the requirement of Rule 57G(2) of the Rules can it be rectified at a later stage, by getting appropriate endorsement on the duty paying documents. In short the question is whether the valid documents should necessarily accompany the inputs when received or whether the documents could follow the inputs and further whether defective documents could be rectified at a subsequent stage.
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.
7. Production of document is a procedural thing required to substantiate the statutory entitlement for availment of MODVAT Credit and when such procedural things are provided for, no hard and fast rules can be held and technicalities could not be brought into play to deny the substantive right given. This is what has been held by this Bench in its impugned order. The main question to be looked into is whether the inputs covered by the G.P. 1s have been actually received and utilised in the manufacture of the specified final products.
8. With the legal position being clear, the probable doubt raised by the applicant cannot be sustained and when the other aspects indicate contrary, the alleged issue of law could not be considered to be arising out of the order. References are meant to be made only when some alternate interpretation is probable and here no such probable alternate interpretation seems to be existing. Therefore, there does not appear to be any need to refer the question to the High Court. The prayer is therefore rejected.