Customs, Excise and Gold Tribunal - Mumbai
Zenith Weaves Pvt. Ltd. vs Commissioner Of Central Excise on 4 December, 2003
ORDER Archana Wadhwa, Member (J)
1. The dispute in the present appeal relates to the admissibility of modvat credit. The appellants were issued three show cause notices proposing to deny modvat credit on the ground that the same has been taken on the basis of invoices issued by the manufacturer in favour of its depots and endorsed by the depots of the said manufacturer. A part of the credit was proposed to be disallowed on the ground that the invoices showed the appellants' factory address at Kim, whereas the goods were actually delivered to the appellants' other factory at Surat and were utilised therein. A portion of the credit availed by the appellants was proposed to be denied on the ground that the same has been availed on the basis of the certificates issued by the jurisdictional Superintendent in lieu of gate pass and the credit was taken after 1.4.1994, when the said certificates were not proper modvatable documents.
2. We have heard Shri K.I. Vyas, learned Advocate for the appellants and Shri J.M. George, learned DR for the Revenue.
3. The appellants' contention in respect of the first objection of the Revenue is that the 30 invoices were issued by the manufacturer in favour of its own depot and the same were endorsed by the depots of the manufacturer to the effect - "consignment of this invoice in original packing has been transferred to M/s. Zenith Weaves Pvt. Ltd." The appellants' contention is that the modvat credit in respect of the appellants' product was introduced with effect from 19.5.1994 and prior to this date they were working under the Proforma Credit Scheme. Inasmuch as the 30 invoices in question relates to period of proforma credit scheme, the strict provisions of the Modvat Credit Scheme were not applicable to them. They have also contended that the matter was taken up by the South Gujarat Texturisers Association with the Central Board of Excise & Customs pursuant to the directions given by the Hon'ble Gujarat High Court and based on the said representation made by the Association, the Board issued a Circular No. 267/69/95-Cx.8 dated 23.6.1995 clarifying that credit in respect of the invoices endorsed by depot of the manufacturer would be available for the purposes of modvat credit provided that the procedures relating to filing D-3 intimation have been followed. It is the appellants' contention that they have filed the D-3 intimation and there is also no dispute that the inputs covered by the said invoices were received and utilised by them. They have also contended that as per the provisions of Notification No. 15/94-CE(NT) dated 30.3.1994 an invoice issued by the manufacturer from its factory or depot is a recognised document for the purposes of modvat credit and inasmuch as the endorsement is only by the depot of the manufacturer, the same cannot be discarded as non-modvatable document. They have relied upon the Tribunal's decision in the case of Arunoday Construction (P) Ltd. v. CC 2001 (137) ELT 426 laying down that the larger bench decision in the case of Balmer Lawrie & Co. Ltd. is not applicable inasmuch as the endorsement on the invoices was by the manufacturers own depot and it was not a case of endorsement of invoices by in between receiver of the raw material.
4. As regards the other nine invoices, the appellants have contended that they have two factories - at Kim and the other at Surat. The invoices in question, though mentioned the address of Kim factory but also clearly specified that the goods are to be delivered to the appellants' factory at Surat. The same were actually received at Surat and utilised at the Surat factory. As such they have submitted that the objection raised by the Revenue is not sustainable. Reliance has been placed on the Tribunal's decision in the case of Larsen & Toubro Ltd. v. CCE 1994 (72) ELT 948.
5. As regards the three certificates issued by the Superintendent in lieu of gate passes prior to 31.3.1994, the appellants have contended that the Tribunal in the case of Galaxy (FRP) Pvt. Ltd. v. CCE 1996 (88) ELT 101 has held that such credit taken on the basis of subsidiary gate passes is valid where the same is taken prior to 30.6.1994. In view of the foregoing, Shri K.L Vyas, learned Advocate for the appellant, prays for setting aside the impugned order.
6. The learned DR reiterates the finding of the lower authorities and submits that the larger bench of the Tribunal held that the modvat credit would not be admissible on the basis of endorsed invoices. The impugned orders are liable to be upheld.
7. We have considered the submissions of both the sides. As regards the first issue, we find that the endorsement on the invoices is by the depot of the same manufacturer. The Tribunal in the case relied upon by the appellant has held that when there is no in between buyer of the inputs and the endorsement is by the manufacturer's own depot, the ratio of the larger bench decision would not be applicable. As regards the other invoices, it is seen that though the address on the invoices is that of their Kim factory, the said invoices mentioned that the inputs are to be delivered at the Surat factory. In these circumstances, the Tribunal's decision in the case of Larsen & Toubro Ltd. holding that when the invoices have been issued in the name of the office but the goods are received in the factory, the same would constitute proper modvatable documents, have to be applied. As regards the modvat credit taken on the basis of certificates issued by the Superintendent prior to 31.3.1994, it is seen that the notification itself provides for taking credit on the basis of such documents provided the credit is taken before 30.6.1994. As such, we do not find any lapse on the part of the appellant to avail the credit on the basis of the said documents especially when there is no doubt or dispute about the receipt of the inputs by the appellants in their factory, their utilisation in the manufacture of the final product and clearance of the final product on payment of duty.
8. We also take note of the larger bench decision in the case of Kamakhya Steels Ltd. v. CCE 2000 (121) ELT 247 wherein the Tribunal, after taking note of the Board's circular, has observed that the minor procedural lapses, if any, should not be made the basis for denial of the benefit of the modvat credit, if the assessee's jurisdictional Assistant Commissioner is otherwise satisfied about the receipt of the inputs. In the absence of any doubt to the above fact, we are of the view that the impugned orders are liable to be set aside.
9. We order accordingly.