Customs, Excise and Gold Tribunal - Delhi
Cce, Lucknow vs M/S. Camphor & Allied Products Ltd. on 16 June, 2001
Equivalent citations: 2001ECR41(TRI.-DELHI), 2002(140)ELT413(TRI-DEL)
ORDER
Archana Wadhwa
1. Being aggrieved with the order passed by the Commissioner (Appeals), Revenue has preferred the present appeal.
2. We have heard Sh. M.M. Dubey, ld. JDR for the Revenue and Sh. V. Narsimhan, ld. advocate with Sh. M.P. Devnath, ld. advocate for the respondents.
3. Originally the respondents were issued a show-cause notice dated 28.5.96 proposing to disallow modvat credit of Rs.1,49,35,146/- on the ground that imported goods have been split into lots and have been despatched separately from ICD Tughlakabad without duty paying documents. However, on adjudication the Assistant Commissioner dropped the proceedings with respect of the credit of Rs.1,08,82,212.52 but disallowed the modvat credit of Rs.40,52,923.48 and imposed equivalent amount of personal penalty on the respondents, on appeal against the above order of the Assistant Commissioner, the Commissioner (Appeals) vide his impugned order set aside the same. Hence the present appeal by the Revenue.
4. After hearing both the sides, we find that the respondents are engaged in the manufacture of Camphor and various other chemical products for which they imported raw material from various countries. The respondents Head office is situated in Bombay and the orders are placed by the Head Office. The raw material is imported through the port at Bombay. After the goods are discharged at Bombay, they are either transported to the factory directly or transferred to the ICD, Tughlakabad, New Delhi from where the raw material is further transported to the respondents factory. The raw material is contained in drums which are transported in a container. In some of the cases the containers are taken to the factory as such. And in some cases the drums contained in the containers are taken out and transferred to their factory in truck. Wherever the goods have been transported to the factory in the containers, there is a no dispute. However, where the containers have been opened at ICD Tuglakabad and the drums containing the raw material have been transferred to the appellants' factory, the Revenue is seeking to deny the modvat credit of duty on the following grounds :-
(i) An amount of Rs.16,77,109.22 was disallowed by the original adjudicating authority that the goods received by the respondents from the port at Bombay are not received in original packing. The container as such has not been received but the drums containing the liquid raw material has been taken out of the containers.
(ii) An amount of Rs.23,75,714.37 was disallowed on the ground that the Original GRs have not been produced by the respondents, showing transportation of the goods to the respondents factory.
5. The Commissioner (Appeals) in his impugned order has observed as under-
"In this regard I have examined the facts and found that modvat credit amounting to Rs.16,77,209.20 involved on 3 Bills of Entry of Sl. 1, 2 & 14 of Annexure to the impugned order has been disallowed on the ground that the same were not received in the original packed condition; whereas the goods were transported/received directly from the Bombay Port to the factory. The material was received at the port in the drums kept in the container and transported in the trucks to the factory and the raw material continued to be contained in the drums only. The appellants have submitted that the phrase "the entire consignment in original packing" used by the Asstt. Commissioner indicates for instance that if a liquid packed in drums is imported in a container, the liquid has to be received in the factory in the drums itself. The liquids is not to be transferred from the drum to any another container and in this case it is not the case of the Asstt. Commissioner that the drums that has been received in the factory are not the drums which originally contained that raw material or that the said drums do not relate to the container or to the particular Bill of entry. From the above it is absolutely clear that the inputs were received in the factory for which modvat credit is admissible and its disallowance is without any legal basis."
After giving our careful consideration to the above reasoning adopted by the Commissioner (Appeals), we do not find any infirmity in the view taken by him. Admittedly, the drums have been received in the respondents factory without opening the same. As such it can be safely concluded that the drums were in the original packing of the liquid raw material. It is (SIC)seen for transportation of the drums a number of them are to be placed in the containers. In fact a container may contain the drums pertaining to various importers in which case the containers have to be necessarily opened and drums taken out. As such we do not find any merits in the Revenue's appeal as regards the above issue is concerned.
6. For the remaining amount of Rs.23,75,714/-, it is seen the Assistant Commissioner disallowed the same on the ground that original GRs have not been produced by the respondents. As against this, Commissioner (Appeals) has relied upon the original copies of Material Receipt Memos, which contained reference of container number and Original Sales Tax Form 31, which indicates that the containers have been transported from Tuglakabad to the factory of the appellants. The Commissioner (Appeals) in respect of the said quantum of credit as observed:-
"Therefore I come to the conclusion that when it is found from above these documents and the related Triplicate copies of Bill of Entries that the inputs have been received in the factory of appellants, there is no reason for disallowance of modvat credit by the Asstt. Commissioner. There is nothing on record to establish that the inputs of a particular Bill of entry have not been received in the appellants factory. Therefore the disallowance of modvat credit by the Asstt. Commissioner on purely technical aspects is not sustainable in law. Since the inputs covered by the Bills of entry as per annexure to the impugned order dt. 31.05.99 of Asstt. Commissioner have been received in the appellants factory and duly entered in Central Excise statutory records i.e. RG 23A Pt. I & Pt. II and Bills of entry etc. and other related documents of appellants, the modvat credit would be admissible to the appellants. Further from the certificates issued by the Freight Carriers, New Delhi as mentioned above establishes the fact that the disputed container Nos. as mentioned in Annexure to the impugned order were actually transported to the appellants factory. Thus the findings of the ld. adjudicating authority that original Material Receipt Memos and original Sales Tax Form 31 documents are susceptible to manipulation is without any factual evidence and is not legally correct."
We fully agree with the above observations and findings made by the Commissioner (Appeals). In the absence of any allegations or any findings that the goods in question were not received in the respondents factory, there is no warrant for denying the modvat credit on the sole ground that the original GRs were not produced by the respondents, especially when the production of original GRs is not legal requirement under any of the provisions of the modvat rules. Accordingly, no merits are found in the Revenue's contention that modvat credit would not be available in such circumstances.
7. In nut-shell, the impugned order in appeal is upheld and Revenue's appeal is rejected.
(Pronounced)