Customs, Excise and Gold Tribunal - Mumbai
Earl Bihari Pvt. Ltd. vs Commissioner Of Central Excise on 24 November, 1998
Equivalent citations: 1999ECR413(TRI.-MUMBAI), 1999(105)ELT605(TRI-MUMBAI)
ORDER Gowri Shankar, Member (T)
1. This is the parties appeal against the above captioned order dated 30-6-1998, praying for holding that the challan-cum-certificate of M/s. Steel Authority of India Ltd. (SAIL), endorsed more than once, as valid duty paying document, and the judgment pertaining to the erstwhile Rule 56A and gate pass is applicable to the SAIL's certificate and the deficiency in the duty paying document cannot be a ground for denying Modvat credit and the credit is not deniable, as there is no dispute about the receipt and the usage of the inputs in the manufacture of declared final products, so also the duty paying character.
2. The facts of the case are that the appellant manufactures excisable goods falling under Chapter Nos. 73, 83 and 84 of the Schedule to the Central Excise Tariff Act (CETA), in their factory at Palghar in Thane district. They have availed of Modvat credit amounting to Rs. 81,278/- on the inputs CRSS sheets based on the SAIL's delivery challan-cum-invoice-cum-certificate, containing more than one endorsement. Under the show cause notice dated 1-12-1992, it was objected by the department, as not valid duty paying document and the availment is wrong. After the hearing of the appellant the Asstt. Collector dropped this show cause notice under order dated 21-5-1993, holding that the full consignment covered under the SAIL's challan cum certificate have been received by the appellant and there is no duty payment character in dispute, and relied upon 1990 (45) E.L.T. 701 in the case of SBS Organics Pvt. Ltd. v. Collector of C. Ex. & Customs, which permits endorsement on the gate pass more than once and the ratio thereof is applicable to SAIL's certificate also. The department went an appeal against the said order. Where the Commissioner set aside the same holding that the judgment pertaining to proforma credit and gate passes are not applicable to this case. He has also distinguished the judgment in the case of Topack Industries (I) Ltd. -1996 (62) ECR 20 that the allowing of endorsement up to 2 times on the delivery challan of SAIL, treating as gate pass is not applicable, on the ground that the challan was in the name of the Head Office of the customer and the second endorsement was only the transfer of the material in the manufacturing unit from the head office of the company and not a sale. Hence this appeal.
3. Both the parties have agreed to decide the case on merits without considering the stay application separately. The ld. Counsel for the appellant has urged that in this case SAIL's challan-cum-invoice is endorsed in favour of the appellant by Jaintex, in whose favour there was already one endorsement of sale. This transaction is during 1992. The Modvat availed on the inputs has been upheld by the Asstt. Collector, and in the appeal it is set aside in spite of the settled case laws that SAIL's document is recognised as a valid duty paying document on par with the gate passes and more than one endorsement is permissible to avail the Modvat. The ld. DR has submitted that the case laws is pertaining to challan and not the certificates. In the reply, it is contended that the certificate is embossed in a rubber stamp on the challan-cum-invoice.
4. The point for consideration is whether there are sufficient grounds to allow the appeal. My finding thereon is in the affirmative.
5. Perused the show cause notice dated 1-4-1992 and the order of the lower authorities and the review order dated 28-7-1993 and the copies of invoice and the appeal memorandum. The documents relied on by the appellant in this case is the delivery challan-cum-invoice of SAIL, which is certified that the excise duty has been paid by the Salem Steel Plant and it pertains to CRSS Sheets dated 21-8-1992, 5-8-1992, 27-6-1992, 6-6-1992 and 16-9-1992. On the reverse, there is an endorsement in favour of Jaintex Pvt. Ltd. (Earl Bihari P. Ltd.) i.e. the appellant. Original customer is M/s. Prakash Steel, who has endorsed in favour of Jaintex, who in turn has endorsed in favour of the appellant, which is a sale transaction. According to the show cause notice the SAIL's delivery challan-cum-invoice is permitted to be endorsed only once as per the Board Circular of 1989. So the main objection is for more than one endorsement. The Asstt. Collector in the order-in-original has clearly analyzed the case and has dropped the show cause notice. But the impugned order has strictly applied the Board circular and distinguished the 8 rulings cited on the ground that they do not directly deal with the certificate of SAIL.
6. Admittedly, there is no dispute in this case that the full consignment covered by the SAIL's challan-cum-certificate have been received by the appellant and duty payment character is made out. Now the decisions in (a) 1997 (95) E.L.T. 82 in the case of CCE, Chandigarh v. Jayenn Castings Ltd., holding that SAIL's challan endorsed twice, is a duty paying document under the Modvat and substantive benefit not to be disallowed merely on account of minor procedure infractions if otherwise due and the credit is permissible under Rule 57G of the Central Excise Rules (Paras 5 & 6); and (b) 1996 (62) ECR 20 in the case of Topack Inds. Ltd. v. CCE Vadodara, it is held that the delivery challans of SAIL treated on par with gate pass and up to two endorsements Modvat credit is permissible vide para 4; and (c) 1998 (101) E.L.T. 420 CCE, Chandigarh v. Saket Steels Ltd., it is held in para 4 that the duty paid character of goods and quantum of duty paid when clearly established from challans issued by SAIL, two endorsements as challans to be treated as valid duty paying document for Modvat under Rule 57G of the Central Excise Rules; and (d) 1997 (19) RLT 330 in the case of Chanderpur Works v. CCE, New Delhi, it is held in para 5 that the challan-cum-invoice issued by SAIL endorsed twice is acceptable as valid duty paying document as entire quantity of goods covered by the endorsed challan received and their end use in the manufacture of final product is not in dispute, the Modvat credit is permissible clearly... the case of the appellant. In view of this legal position, the contention of the respondents that the Modvat credit is not permissible, cannot be upheld. There is no separate certificate by SAIL in this case, as already observed above. Even the finding of the Commissioner (Appeals) that the judgment pertaining to gate pass and Rule 56A did not apply to this case, also cannot be upheld, in view of the clear decisions of the Tribunal in the above case laws. So under these circumstances, the contention of the appellant is upheld, and the point raised is answered in the affirmative. Hence I pass the following order :
ORDER For the reasons indicated above, the impugned order is set aside and the appeal is allowed with the consequential relief according to law.