Custom, Excise & Service Tax Tribunal
M/S Ghatge Patil Industries Ltd vs Cce, Pune on 6 August, 2014
IN THE CUSTOMS, EXCISE AND SERVECE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT NO. II IN APPEAL NO. E/763/97 (Arising out of Order-in-Appeal No. P/6/97 dated 14.01.1997 passed by the Commissioner of Central Excise (Appeals), Pune.) For approval and signature: Honble Shri Anil Choudhary, Member (Judicial) =====================================================
1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : Yes CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether their Lordships wish to see the fair copy : Seen
of the order?
4. Whether order is to be circulated to the Departmental : Yes
authorities?
=====================================================
M/s Ghatge Patil Industries Ltd.
: Appellant
Versus
CCE, Pune
: Respondent
Appearance
Shri M.A. Nyalkalkar, Advocate
: For Appellant
Shri S.G. Dewalwar, Addl. Commr. (A.R.)
: For Respondent
CORAM:
HONBLE SHRI ANIL CHOUDHARY, MEMBER (JUDICIAL)
Date of Hearing : 06.08.2014 Date of Decision: 06.08.2014
ORDER NO.......................................................
Per: Anil Choudhary:
The appellant has filed this appeal against Order-in-Appeal No. P/6/97 dated 14.01.1997 passed by the Commissioner of Central Excise (Appeals), Pune.
2. Brief facts of the case are that the appellant in this case have been denied MODVAT Credit for the period April, 1994 to July, 1994 on the ground that the invoices on the basis of which the credit was availed were not in their name, but were endorsed in their favour by the dealers (Re-sellers) who had purchased vide the invoices. The appellant submitted that under Notification No. 16/94 only 3 types of transactions are covered for MODVAT purposes, but the business transactions with the traders were not considered in the Notification. As a normal business practice, the scrap generated in the big engineering unit is cleared and sold on tender system to a higher bidder/trader of scrap. The traders lift the goods from the manufacturing unit in their name and divert or re-sells them directly to the end user who require, as in the present case. Such scrap traders though wholesale distributors, were not considered as distributor or dealer of a manufacturer, within the scope of the said Notification No. 15/94 and the invoices issued by such traders were not considered valid for MODVAT purposes till 04.07.1994 when vide Notification No. 32/94 Rule 57GG was inserted providing for manner and modality for registration of dealers/traders & issue of cenvatable invoices by them. In view of the situation the matter was referred to the Collector, Central Excise, Pune vide representation dated 14.04.1994 and a clarification was sought from the department as to whether MODVAT Credit can be availed on the strength of the invoices issued by the traders based on the endorsed invoice/gate passes under Rule 52A, received by him from the manufacturer, or not. However, no clarification or directives came from the department and therefore they started availing of the credit on the basis of invoices issued by the original manufacturer duly endorsed by the trader as was the procedure prior to 1.4.1994. The Order-in-Original dated 11.06.1996 confirmed the demand in pursuance to show-cause notice dated 09.02.1995 for demand of Rs. 1,26,666/-, being input tax credit on such inputs received from dealers, wherein the invoices were endorsed in favour of the appellant, was disallowed in view of the amendment brought in Rule 57 G (2) of Central Excise Rules under Notification No. 15/94, and also penalty of Rs. 12,666/- was imposed under Rule 57G of Central Excise Rules, 1944. Being aggrieved, the appellant had filed appeal before the Commissioner (Appeals) who vide the impugned order rejected the appeal mainly on the ground that invoices on the basis of which MODVAT Credit was availed, were not issued in favour of the assessee but were endorsed in their favour, wherein after 31.03.1994 such endorsement is not permissible.
3. Learned Counsel for the appellant states that the Rule prescribing the registration of first stage dealer was brought on statue under Rule 57GG of Central Excise Rules, 1944 only on 04.07.1994. Secondly he relies on the CBEC Circular No. 76/76/94-CX dated 08.11.1994 wherein para 6 of the Circular is as follows:-
6. It is further clarified that document prescribed above by the Central Board of Excise and Customs could be accepted by the Assistant Collector only upto 31st December 1994. In other words, any document issued by registered person prior to such registration would be acceptable if he is eligible to issue invoice/document under Notification No.15/94-CE (NT) and Notification No.21/94-CE (NT).
4. Thus, vide the above Circular facility of endorsement was extended by the Revenue till 31.12.1994. He relies on the ruling of Hon'ble Bombay High Court in the case of Simplex Mills Co. Ltd. Vs. CCE, Mumbai-IV - 2007 (81) RLT 331 (Bom.) wherein the question was involved whether invoice issued under Rule 52A of CER by a Manufacturer and endorsed in favour of MODVAT availer is valid under first proviso of Rule 57 G (2) of CER after 01.04.1994. Thus the appellant prays for allowing the appeal.
5. The learned A.R. appearing for the Revenue relies on the impugned order and also on the CBEC Circular dated 08.11.1994 (supra).
6. Having considered the rival contentions, I find that the CENVAT credit availed during the period April, 1994 to July, 1994 and also before 31.12.1994 was permitted by the Board Circular (supra) dated 08.11.1994 and also the issue is covered by the Ruling of Hon'ble Bombay High Court in the case of Simplex Mills Co. Ltd. (supra), in favour of the appellant.
7. Thus, the appeal is allowed and the impugned order is set aside. The appellant shall be eligible for the consequential benefit as the appellant has paid by debit in RG-23A, Part II the duty earlier in pursuance of the appeal. The appellant had also deposited the penalty and interest by challan. The appellant is permitted to take CENVAT credit of Rs. 1,26,666/-, and also entitled for interest as per Rules.
(Dictated and pronounced in open Court) (Anil Choudhary) Member (Judicial) Sp 5