Customs, Excise and Gold Tribunal - Delhi
Maharaja International Ltd. vs Collector Of C. Ex. on 26 February, 1996
Equivalent citations: 1996(84)ELT466(TRI-DEL)
ORDER K. Sankararaman, Member (T)
1. The appellants are manufacturers of various domestic electrical equipments. They had taken modvat credit in respect of certain materials produced by them on 'High Sea' sales' basis. The parties who had imported the goods in question were having special import licences to cover the same and they could sell them to actual users like the appellants. The goods after clearance were transferred to the appellants and the triplicate copies of the relevant bills of entry were endorsed by the respective importers in favour of the appellants. Such endorsements were to the effect that the entire consignments covered by such bills of entry have been delivered to the appellants directly from the port of importation and that no refund of countervailing duty paid has been claimed nor will it be claimed. The appellants thereafter filed the copies of the bills of entry with the Central Excise authorities with a declaration that they intended to avail the facility of countervailing duty credit under Rule 57-A. They were issued a show cause notice dated 22-4-1992 alleging that they had wrongly availed the credit of specified duty on the basis of bills of entry which were not in their name. The case was adjudicated by the Collector vide his order dated 16-10-1993. Hence, this appeal.
2. Shri A.S. Sunder Rajan, learned counsel for the appellants states that in a series of decisions the Tribunal has upheld the availment of Modvat credit on the strength of endorsed bills of entry, One such decisions has been reported in 1995 (10) RLT 650 in the matter of Krishna Strips Ltd. v. CCE. If the stand taken in the impugned order were to be accepted as correct, that would nullify the special import licences scheme which permits importers to import goods for "stock and sale". It would also then necessitate all imports of such goods to be directly effected by the manufacturers themselves which may not be a practicable proposition and which will interefere with the pattern of trade and commerce. In the present case, the goods were specifically ordered by the concerned importers as per the requirements of the appellants and the goods came to be imported accordingly. He pleaded that the impugned order be set aside.
3. Heard Shri Mewa Singh, learned SDR by way of reply to the submissions made by the learned counsel.
4. We have considered the submissions made. On a perusal of the copies of relevant bills of entry, we find that the marks and numbers furnished therein refers to Maharaja Company Ltd. which bears out the contention raised by the learned counsel that these goods had been imported by the concerned importers at the instance of the appellants. The endorsements made in the bills of entry clearly established a link between the goods imported and the goods received by the appellants in their factory for use in the manufacture of their final product in which connection they have availed the Modvat credit. The relevant provisions of Rule 57-G of Central Excise Rules which referred to the documents on the strength of which Modvat credit can be taken do refer to bills of entry. By an amendment made in 1995 obviously as a measure of clarification of such document the reference has been made specifically to triplicate copy of bill of entry. A bill of entry which is endorsed by the importer in favour of the appellant who is a manufacturer of excisable goods does not cease to be a duty paying document merely because it has been endorsed. The finding in the impugned adjudication order on the ground that the bill of entry does not stand in the name of the manufacturer who has claimed the Modvat credit does not flow from the language of Rule 57-G (2) proviso which refers to the types of duty paying documents which should be produced in support of the claim for Modvat. It has been rightly pointed out by the learned counsel that the Tribunal has taken a consistent stand for allowing Modvat on the strength of endorsed bills of entry. Such an approach would be fully justified in the present case also. We hold accordingly and set aside the impugned order. The appeal is allowed.