Customs, Excise and Gold Tribunal - Delhi
M/S. Modi Xerox Limited vs C.C.E. Meerut on 24 November, 2000
Equivalent citations: 2001(131)ELT140(TRI-DEL)
ORDER
K.K. Bhatia, Member (TT)
1. The appellants - M/s. Modi Xerox Ltd. are the manufacturers of Photo Copy Machines of different models and parts thereof. They purchased the components of photo copy machines from different suppliers. Thereafter, they availed the modvat credit of the duty paid on these parts and components in terms of provisions of Rule 57A of Central Excise Rules, 1944. Certain parts and components were supplied to them by M/s. Supreme Industries Ltd. during the period from 6.6.93 to 30.12.94. The appellants took the credit on the basis of the invoices issued under Rule 57G in respect of these. They subsequently received, 10 Nos. supplementary invoices due to the enhancement in value of the item earlier supplied by M/s. Supreme Industries Ltd. on the strength of which they took the modvat credit of Rs.2, 65,079.89 on 12.7.95 in their RG.23A Part II in terms of Rule 57E. Since, however, all the 10 Nos. supplementary invoices issued by M/s. Supreme Industries Ltd. were bearing the date of their issue as 30.11.94 and 30.12.94 the modvat credit in respect of these invoices was availed by the party on 12.7.95 i.e., after a period of six months of the date of issue of the invoices, the proceedings were initiated against them for recovery of this amount. They were issued a Show Cause Notice dt. 20.12.95, in which they were called upon to show cause why credit should not be disallowed and recovered from them under Rule 57-I for taking credit in violation of Rule 57G(2). On considering the reply of the party, the Asst. Commissioner of Central Excise Division, Rampur in his Order dt. 12.10.97 observed that in the second proviso to Rule 57G(2), it is directed that the manufacturer shall not take credit after six months of date of issue of any documents specified in the first proviso to this sub-rule. In this case, the credit had been taken after the expiry of six months of the date of the invoices issued under Rule 52A which is not in consonance with the proviso to this sub-rule. He therefore, confirmed the demand of Rs.2,65,079.89 on the appellants.
2. The appeal of the party before Commissioner (Appeals), Chandigarh did not succeed and the Commissioner (Appeals) dismissed the appeal of the party upholding the order passed by the original authority.
3. The present appeal is against the above order of the lower appellate authority. I have heard Shri M.P. Dev Nath, Advocate for the appellants and Shri R.C. Sankhla, JDR for the Respondents. Ld. Advocates for the appellants contended that the Rules 57E is a specific rule which applies to the case where there is adjustment of credit. Had the intention of the legislature been to prescribe a limit of six months on the claims which are adjustments of credit as prescribed in Rule 57E, there would have been the specific limitation clause in Rule 57E itself. Rule 57G cannot be stretched to the extent as to apply to Rule 57E also because Rule 57E and 57G dealt with different situations. It is further contended that the Superintendent of Central Excise of the supplier's Range had also issued a certificate in respect of the differential duty paid subsequent to the appellants taking the modvat credit in their RG.23A Part-II. The Id. Advocate relied on the following decisions in support of his submissions:
(a) C.C.E., Mumbai-I vs. Avcon Controls (P) Ltd. - 1999 (31) RLT 883 (CEGAT),
(b) C.C.E., Jaipur vs. Raghuvar (India) Ltd.-2000 (118) ELT 311 (S.C),
(c) Utkal Asbestos Ltd. vs. CCE, Bhubaneswhar - 2000 (38) RLT 573 (Cegat _ L.B).
4. Shri R.C. Sankhla, JDR for the Revenue submitted that the appellants had already received the inputs and therefore the provisions of Rule 57G are applicable to their case. He further stated that in Rule 57E, there is a reference to Rule 57A and Rule 57G. Hence, the provisions under these rules would be applicable to the credit availed under Rule 57E. It is further contended that the certificate under Rule 57E was issued by the Superintendent of Central Excise at the suppliers' end after the date of availing the modvat credit by the appellants and since they had not taken the credit on the strength of this certificate, the same is irrelevant for the purpose of present appeal. The Id. JDR relied on the decision of the larger Bench of CEGAT in M/s. Kusum Ingots & Alloys Ltd. & Anr. Vs. CCE Indore & Anr. [2000 (39) RLT 440 (CEGAT - L.B)], in which it is held that after amendment of Rule 57G by Notfn. No.28/96-CE (N.T) dt. 29.6.96, the assessees are not entitled to take credit beyond a period of six months from the date of duty paying documents issued prior to the amendment.
5. I have carefully considered the submission made before me. The facts of this case are already stated above. The appellants availed the modvat credit of Rs. 2, 65, 079.89 in their RG.23A Part II on 12.7.95 on the strength of 10 Nos. of Supplementary invoices dated 30.11.94 and 30.12.94 issued by their suppliers -M/s. Supreme Industries Ltd. This modvat credit is availed under the provisions of Rule 57E. This rule is as follows:
"Rule 57E: Adjustment in duty credit:- If duty paid on any inputs in respect of which credit has been allowed under rule 57A, is varied subsequently due to any reason resulting in payment of refund to or recovery of more duty from, the manufacturer or importer, as the case may be, of such inputs, the credit allowed shall be varied accordingly by adjustment in the credit account maintained under sub-rule (3) of rule 57G or in the accounts maintained under rule 9 or sub-rule (1) of rule 173Q, or if such adjustment is not possible for any reason, by cash recovery from or, as the case may be, refund to the manufacturer availing of the credit under rule 57A"
6. The extracts from the provisions of Rule 57G (2) are also appended below:
" (2) A manufacturer who has filed a declaration under sub-rule (1) may, after obtaining the acknowledgement aforesaid, take credit of the duty paid on the inputs received by him:
Provided that no credit shall be taken unless the inputs are received in the factory under the cover of an invoice, issued under rule 52A, an AR-1, or triplicate copy of a Bill of Entry, a certificate issued by an Appraiser of Customs posted in Foreign Post Office or any other document as may be prescribed by the Central Government by notification in the Official Gazette in this behalf evidencing the payment of duty on such inputs.
Provided further that the manufacturer shall not take credit after six months of the date of issue of any of the documents specified in first proviso to this sub-rule:"
7. It would be seen from the above provisions that under Rule 57E, no document is prescribed on the strength of which the manufacturer would e entitled to avail the benefit of the modvat credit in respect of the duty paid subsequently by the supplier of the inputs. Therefore, the provisions under Rule 57E are only enabling provisions to enable the concerned party to vary the availed credit subsequently in the event of the conditions obtaining under this rule. For the purpose of ascertaining the documents relevant to this rule, one must necessarily refer to the first proviso under rule 57G(2) which provides that no credit shall be taken unless the inputs are received in the factory under the cover of an invoice issued under Rule 52A, an AR-I, or triplicate copy of Bill of Entry etc. or any other documents as may be prescribed by the Central Government evidencing the payment of duty on such inputs. And once it is admitted that for the purpose of Rule 57E, the prescribed documents are under the provisions of Rule 57G(2), the rider in the second proviso to this rule will automatically become operative.
8. In this case, the appellants have availed modvat credit of the duty on the strength of the supplementary invoices issued by the suppliers of their inputs. Since such credit is availed after a period of more than six months of the date of issue of such supplementary invoices, they are hit by the bar under the second proviso to Rule 57G(2). The case laws cited by the id. Advocate for the appellants are not relevant to the facts of the present case. In the Supreme Court judgment, in the case of M/s. Raghuvar (India) Ltd. (supra) it is held that the provisions of section 11A of Central Excise Act, 1944 had no application to any action taken under Rule 57-I prior to its amendment on 6.10.1998 and Rule 57-I is not in any manner subject to Section 11A ibid. In the present case, however, as per the analysis above, it is held that for the purpose of availing the benefit under Rule 57-E, the prescribed documents are specified under Rule 57G(2) and since benefit of modvat credit of duty on such documents cannot be availed after expiry of six months as provided in this rule, this time bar would be applicable to the cases under Rule 57-E.
9. A contention is also raised by the appellants that subsequently, the Superintendent of Central Excise controlling the factory of their supplier had issued a certificate certifying the payment of differential duty at the end. Since however, the appellants have not taken the credit on the strength of such certificate and no findings relating to the same are given by the lower authorities, no comments are called for in this regard.
10. In view of the above analysis, the appeal fails and the same is rejected upholding the orders passed by the lower authorities.