Customs, Excise and Gold Tribunal - Delhi
Klockner Supreme Pentaplast Ltd. vs Commr. Of C. Ex. on 29 June, 1998
Equivalent citations: 1999(114)ELT253(TRI-DEL)
ORDER V.K. Agrawal, Member (T)
1. The appellants have filed the present appeal against the disallowance of Modvat credit on the ground that the re-constructed triplicate copy of the Bill of Entry cannot be considered as valid document for availment of Modvat credit.
2. Shri V. Sridharan, Learned Advocate submitted that the appellants imported inputs for use as raw material in their factory. After clearance of the imported inputs from the Customs they received the goods under the cover of the original of the triplicate copy of the Bill of Entry No. 3171 dated 9-12-1994 and took the Modvat credit amounting to Rs. 8,13,590.75 in their RG 23A Part II. On account of major renovation and repair of their office premises some of the documents including the original of the triplicate copy of the Bill of Entry was mis-placed. They applied and got re-constructed copy of the triplicate copy of the Bill of Entry from the Custom Department for producing before the Range Officer for the purpose of defacing the same. A show cause notice dated 20-10-1995 was issued to them for disallowing Modvat credit alleging that the Modvat credit was taken on the basis of the photocopy of triplicate copy of the Bill of Entry which was not valid document under Rule 57G(2) of the Central Excise Rules. The learned Advocate submitted that in their reply to the show cause notice they had clearly mentioned that they had availed credit of duty on the basis of triplicate copy of the Bill of Entry and not on the basis of photocopy of the duplicate Bill of Entry; that after availing credit on the basis of triplicate copy, the same was mis-placed by the officer looking after the Central Excise work and, therefore, they could not produce the triplicate copy at the time of defacing. The learned Advocate emphasised that Revenue has not at any stage i.e. original adjudication as well as first appeal, has controverted the submissions made by them about availing of the Modvat credit on the basis of original triplicate copy of the Bill of Entry. He mentioned that the Modvat credit is not deniable to the appellants as the original adjudicating authority has clearly given finding in the Order-in-Original No. 1/97, dated 10-1-1997 that "the receipt of the input in the factory and utilisation for manufacturer of final product is not disputed". The Additional Commissioner disallowed the Modvat credit to them holding that no relaxation for credit when the triplicate copy of Bill of Entry is lost in transit is existing and therefore, re-constructed copy is not a valid document. The similar view was held by the Commissioner (Appeals) while confirming the Order-in-Original. The learned Advocate relied upon the decision of the Appellate Tribunal in the case of Steel Moulds and Anr. v. C.C.E. - 1996 (62) ECR 322 (Tribunal) in which the Appellate Tribunal remanded the matter to the department for re-consideration of eligibility to Modvat credit on the basis of certified xeroxed copy of triplicate copy of Bill of Entry. The learned Advocate emphasised the fact that Modvat credit was availed of by them on the strength of original copy of triplicate Bill of Entry and only after availing the credit the Bill of Entry was mis-placed and they had taken the re-constructed copy from the Customs for the purpose of getting it defaced from the Range Officer.
3. Shri D.K. Nayyar, learned DR submitted that the proviso to Rule 57G(2) specifies the documents on the basis of which credit can be taken by the manufacturer. One of the prescribed documents is triplicate copy of the Bill of Entry and not re-constructed copy of the Bill of Entry. He submitted that the Tribunal in the case of HCL Office Automation v. C.C.E. - 1997 (95) E.L.T. 667 did not allow the Modvat credit on the basis of original copy of invoice as the duplicate copy of the invoice was misplaced in the factory and could not be traced. The learned DR submitted that as in this case also the triplicate copy of the Bill of Entry has been lost in office, no remedy has been made available to the manufacturer for taking credit in such an eventuality. He contended that if the manufacturers are allowed to take credit on such copies the practice is fraught with danger to the Revenue and is liable to be misused. He submitted that there is a rationale behind prescribing the specified documents for the purpose of availing of the credit as the very small number of officers are supervising and controlling the availment of credit all over the country. The manufacturer is required to produce the original duty paying document to the Range Officer under Rule 57G(4) along with monthly return. He submitted that both Sub-rules (2) and (4) are to be read harmoniously. He also relied upon the decision in the case of Netplast Ltd. v. C.C.E. - 1996 (87) E.L.T. 434 in which it was held that credit cannot be taken on the basis of photocopy of gate passes after the amendment of Rule 57G(4) with effect from 1-1-1990 providing for taking of Credit on the basis of original copy. The reliance was also placed on the decision in the case of Nestle India Ltd. v. C.C.E. - 1998 (99) E.L.T. 443 (Tribunal), in which it was held that original copy of invoice is not a valid document for taking Modvat credit.
4. In reply, the learned Advocate on behalf of the appellants submitted that the department has nowhere controverted their plea that the credit was taken on the basis of original copy of triplicate Bill of Entry, and therefore, the reasonable conclusion would be that the department was convinced by the appellants' reply as held by the Appellate Tribunal in the case of Shri Ram Refrigeration Ltd. v. C.C.E. - 1986 (26) E.L.T. 353. He further submitted that HCL Office Automation case relied upon by the learned DR, is not applicable to the facts of the present case as the Tribunal was interpreting the phrase lost in transit' in that case. In the present appeal, the triplicate copy of the Bill of Entry was not lost in transit and the credit was taken only on the basis of the triplicate copy. In respect of Nestle India Ltd. case, he submitted that an application for rectification of mistake has been filed and the order has been reserved by the Tribunal. Finally, the learned Advocate submitted that unlike invoice issued by the manufacturers, original and duplicate copies of Bill of Entry remain with the department and on the basis of those copies, the department has re-constructed the triplicate copy of Bill of Entry and gave it to them. He again referred to the decision in the case of Steel Moulds and Anr. (supra).
5. We have considered the submissions made by both the sides. We observe that the Additional Commissioner in the impugned Order-in-Original has clearly given his findings that the receipt of the input in the factory and utilisation for manufacture of final product is not disputed. The only point for consideration was whether attested copy of the triplicate copy of Bill of Entry can be considered as a valid document under Rule 57G(2). The appellants have vehemently submitted that the imported inputs were received inside the factory accompanied with the original copy of the triplicate copy of Bill of Entry, and the credit was taken by them only on the strength of such copy. The learned Advocate had shown to us that such a contention was made by them in their reply dated 24-11-1995 to the show cause notice. Neither the Additional Commissioner nor the Commissioner (Appeals) has referred to this submission of the appellants in either of the impugned order. Once it is not disputed by the department that the inputs have been duly received by the appellants and they have been used in the manufacture of declared finished product and the fact that receipt of the goods under original copy of the triplicate copy of Bill of Entry not controverted by the department, Modvat credit cannot be simply denied on the basis of that. They have submitted an attested copy of the triplicate copy of the Bill of Entry along with monthly statement to the Range officer. Once the department is satisfied about the receipt of the inputs which are imported one and which were imported by the appellants themselves and the inputs have been utilised in the manufacture of finished product, it may safely be presumed in the light of these facts that the substantial compliance for availing the Modvat credit has been done by the appellants and merely presenting a reconstructed copy of the Bill of Entry should not debar them from availing the Modvat credit. In the light of these facts and circumstances, we hold that the appellants are eligible to avail of Modvat credit in the present matter and, accordingly, the appeal is allowed.