Customs, Excise and Gold Tribunal - Delhi
Commissioner Of Central Excise vs L And H Sugar Mills Ltd. on 5 November, 1998
Equivalent citations: 1999(105)ELT368(TRI-DEL)
ORDER J.H. Joglekar, Member (T)
1. The assessees manufactured sugar and used gunny bags to pack the sugar in. Such gunny bags were declared to be eligible inputs only w.e.f. 16-3-1995. The assessees filed the requisite declaration under Rule 57H(1) in order to take Modvat credit of the duty paid on the gunny bags lying in the stock. It appears that no show cause notice was issued but that the assessees were directed to appear before the Assistant Commissioner which they did on 31-5-1996. After hearing the assessees, the Assistant Commissioner denied the transitional credit in the following words :
"I have carefully gone through the case records and submissions made by the party both oral and written. I find that the main point to be decided in this case is whether the Modvat credit is admissible on the invoices issued by a non-registered dealer. The Rule 57GG of Central Excise Rules, 1944 makes it explicit that every person who issues invoice or invoices under Rule 57G or as the case may be under Rule 57T shall get registered under Rule 174. This rule was very well in existence at the material time therefore the Modvat credit against the invoices is not admissible."
2. The assessees then filed an appeal. The Commissioner cited the Tribunal judgment in the case of Tripty Drinks (P) Ltd. v. CCE., Bhubaneswar reported in 1997 (92) E.L.T. 526 (Tribunal) as in the case of Bengal Sefety Industries v. C.C.E., Calcutta reported in 1997 (92) E.L.T. 81 (Tribunal). In these judgments, it was held that substantive benefit could not be denied merely because of procedural lapse. He held that there was no reason to deny the credit and allowed the assessees' appeal. Against this order the Revenue have filed this appeal.
3. In the appeal memorandum, it has been claimed that the ratio of the judgments, relied upon by the Commissioner, was not relevant; that on the material date, namely, 6-3-1995, the law in the form of Rule 57A and Rule 57H required that credit could be taken only on the basis of invoices issued by the registered dealers and not otherwise and since the invoices in the present case were issued by the un-registered dealers, benefit was wrongly extended by the Commissioner. The appeal memorandum also drew support from the following judgments:
1. C.C.E. v. Jain Bhavani Steel Enterprises (P) Ltd. - 1996 (83) E.L.T. 537 (Tribunal)
2. Jenny Plywood Ind. Ltd. v. C.C.E. -1997 (96) E.L.T. 606 (Tribunal)
3. Jayana Time Ind. Ltd. v. C.C.E. -1997 (93) E.L.T. 245 (Tribunal)
4. Poddar Udyog Ltd. v. C.C.E. -1997 (95) E.L.T. 438 (Tribunal)
4. Shri Arunachalam, ld. DR reiterated the submissions in the appeal memorandum. He, further, stated that the finding of the Commissioner in paragraph 7 of the impugned order is not borne out on perusal of the order-in-original. He stated that the Assistant Commissioner had observed that the goods had been purchased from the traders, who in turn, had purchased them from the manufacturer. Therefore, the observation of the Commissioner that the goods were directly received from the manufacturer and that their duty paid character established, was not correct.
5. Shri Kapil Vaish, ld. C.A. appearing for the assessees stated that at the time of filing of the declaration, they had presented a chart which enclosed the traders' invoice, the carriers' documents as also the invoice issued by the manufacturer. He stated that the co-relation between the goods received under the traders' invoice could rightly show that the goods were the same as more left the manufacturers' factory under Rule 52A invoice. He stated that because this was not in doubt, the Assistant Commissioner confined the rejection only to the issue of dealers not being registered.
6. I have carefully considered the submissions made.
Rule 57H is designed to extend credit facilities on the goods which are already received and stored in the factory. While it may be true that the rule required, the trader be registered with the department, where the input was earlier not admissible input, it is futile to expect a trader to get himself registered in anticipation of an announcement by the Government of India at a later date that a particular input would be included in the ambit to the eligible inputs. Where a particular provision has to be interpreted, the interpretation cannot be such as to render the very provision null and void. The various case law cited by both sides is not relevant here. The case here is of a burden placed upon a dealer which is impossible for him to discharge. The Commissioner is correct in extending the benefit.
7. I have also taken cognizance of the plea of the ld. DR that the duty paid nature of the goods received and declared should be permitted to be done by the Asstt. Commissioner by remitting the proceedings for de novo action. I do not consider it to be appropriate. The Asstt. Commissioner's order specified that the duty paying documents were examined. The proceedings initiated by him were not on the grounds of the duty paid nature but on the ground that the invoice was not in conformity. I, therefore, do not consider it proper to remit the proceedings back to the Asstt. Commissioner.
8. Upholding the impugned order, this appeal from the Revenue is dismissed.