Customs, Excise and Gold Tribunal - Delhi
Godrej Foods Ltd. vs Cce on 23 August, 2006
ORDER M.V. Ravindran, Member (J)
1. This appeal is directed against order in appeal dated 5th March, 2004 which upheld the order which denied the modvat credit to the appellant.
2. The relevant facts that arise for consideration are appellant received some packing material vide invoice dated 11/02/99. Appellant availed modvat credit on the original invoice since duplicate copy of the invoice was lost in transit. On being pointed out by the range authorities appellant reversed the modvat credit taken on original invoice on 13/07/99. Appellant applied to the Jurisdictional Assistant Commissioner on 10/08/99 for granting them permission to avail modvat credit and on the same date availed the credit in RG 23 A Part II. Show cause notice was issued to the appellant on the ground that their application for availing credit on original invoice has been rejected by the Jurisdictional Assistant Commissioner. The adjudicating authority confirmed the demand, also imposed penalty and sought the recovery the interest on such modvat credit. On an appeal, Commissioner (Appeal) also concurred with the views of the lower authority. Hence this appeal.
3. Learned advocate appearing for the appellants submits that the availment of credit by them on date of application i.e. on 10/08/99 was in order as to avoid the legal complications that may arise as the invoice was dated 11/02/99 and any credit taken after six months could be invalid as per the provisions of Rule 57G(6). He relies upon the Larger Bench decision in the case of Commissioner of Central Excise, New Delhi v. Avis Electronics Pvt. Ltd. as reported at . It is his submission that when they availed the modvat credit in August, 1999, they had the balance of Rs. 4,39,00,000/- (Rupees Four crore Thirty Nine Lakhs only) in the RG-23 Part II account and as on today also they have balance of Rs. 69,02,000/- (Rupees Sixty Nine Lakhs and Two Thousand only) in the RG023 Part II account.
4. Learned DR on the other hand submits that the appellant should have approached the Jurisdictional Assistant Commissioner to grant them permission to avail modvat credit on the original copy of the invoice well before the time. It is not left for the appellant to avail the credit and then make an application on the same day. Since, there is no provision to grant ex-post-facto permission, the modvat credit denied to the appellant, is justified.
5. Considered the submissions made at length by both sides and perused records. It is not in dispute that the appellant had received the inputs covered under invoice dated 11/02/99 and consumed in the factory. Only question being disputed is that the appellant had not applied for the permission from the authorities before the availment of the credit on original invoice. The Commissioner (Appeals) has rejected the appeal of the appellant on the following ground:
But in this case I find the appellant had taken credit suo moto even without waiting for the permission of the competent authority. As such their action is in violation of the letter and spirit of the said rule. The question of actual receipt of goods in this regard is irrelevant, as no enquiry by the proper officer to satisfy himself regarding the entire matter, as envisaged in the said rule could be done.
6. I find that provision of 57G(6) are very relevant which read as under:
Notwithstanding anything contained in Sub-rule (3) of Rule 52A-
(i) a manufacturer may take credit on inputs received in his factory ; or
(ii) a person registered under Rule 174 for issue of invoice under Rule 57G or as the case may be, under Rule 57T may make receipt entries in register maintained under Rule 57GG, on the basis of-
(a) original invoice, if duplicate copy of the invoice has been lost in transit; or
(b) a certificate issued by the proper officer of Customs at the port/airport of the importation of such goods, if triplicate copy of bill of entry or duplicate copy of bill of entry generated on Electronic Data Interchange System installed in any Customs or Central Excise Commissionerate, as the case may be, has been lost in transit, subject to the satisfaction of the Assistant Commissioner of Central Excise that the inputs have been received in the factory of the said manufacturer or, as the case may be, the said person registered under Rule 174, and the duty was paid on such inputs.
Provided that no credit or receipt entry, shall be allowed under this sub-rule after six months of the date of issue of the said invoice or bill of entry, as the case may be, and where the intermediate products manufactured by the user of inputs specified under Rule 57J are received by the manufacturer, after nine months.
7. From the plain reading of the above said rule, it can be seen that the credit of the inputs received in the factory can be availed on the original invoice if the duplicate of the invoice has been lost in the transit subject to the satisfaction of the Assistant Commissioner of Central Excise that the inputs has been received in the factory and the duty was paid on such goods. I find that in this case, both these important aspects are undisputed. If that be so, the Assistant Commissioner's letter dated 22/11/99 indicating to the appellant that cannot be any post facto sanction does not hold ground and is against the principles of the law under Rule 57G(6). It is for the Assistant Commissioner to consider Rule 57G(6) in its entirety and come to the conclusion. Further, I find that the appellant had produced a statement of Cenvat Credit balance from August 1999 to June 2006, wherein the closing balances as indicated, were almost in crores and the appellant could not have technically said to have mis-utilised the credit availed on 10/08/99. I find that the Larger Bench in the case of Avis Electronics Pvt. Ltd. (Supra) at paragraph '7' has held as under:
Learned Counsel representing the manufacturers, respondents in this case, submitted that as per the existing provisions contained in the Rules, Modvat credit can be claimed only within a period of six months. In cases where duplicate copies are lost and concerned Assistant Collector is moved for getting sanction to use the original invoice for availing Modvat credit, that officer can successfully deny the benefit to the manufacturer by delaying orders on the application. Since Modvat credit can be claimed within six months and if the concerned Assistant Collector is not passing the order on the submission regarding loss of the duplicate within that period, the manufacturer should not be put to difficulty. If such a situation arises, according to us, the manufacturer can take the credit within six months but should not avail it of before the concerned Assistant Collector passes order on the issue relating to loss of the duplicate copy in transit. This will safeguard the interest of the manufacturer as well as the Revenue.
8. Accordingly, considering the whole case in its entirety read with Rule 57G(6) and order of the Larger Bench case in the Avis Electronics Pvt. Ltd., I find that the Jurisdictional Assistant Commissioner should have gone by the spirit of the law as envisaged in the Rules 57G(6) and considered whether the inputs have been received and duty liability has been discharged and then accorded sanction to the appellant for availing the modvat credit on the original duty paying document as the duplicate copy of the duty paying document was lost in transit. I find that the appellants had produced an affidavit of the transporter, along with the applications, made to the Jurisdictional Assistant Commissioner. On the face of such an over-whelming evidence, I do not find any reason to deny the modvat credit to the appellant on the original copy of the duty paying document.
9. Accordingly, the appeal filed by the appellant is allowed and the impugned order is set aside. Appeal allowed.
(Dictated and pronounced in the open court)