Customs, Excise and Gold Tribunal - Mumbai
Commissioner Of Central Excise vs Echjay Inds. Ltd. on 5 March, 2004
ORDER K.D. Mankar, Member (T)
1. The instant appeal from revenue is directed against the order-in-appeal passed by the Commissioner (Appeals). Vide the impugned order the Commissioner (Appeals) allowed the respondent's claim of modvat. The original authority had rejected the claim.
2. Heard both sides.
3. It is alleged that, the respondents took modvat credit on the steel items received in their factory on the basis of invoices issued by M/s TISCO Ahmedabad. It was informed by the Range Superintendent in charge of M/s TISCO Ahmedabad that the modvatable invoices issued by the TISCO Ahmedabad (a registered dealer) are invalid documents. In a separate show cause notice issued to the said registered dealer (TISCO Ahmedabad) it has been alleged that the said invoices happen to be invoices issued by the third or subsequent stage dealer. With effect from 01/09/1996 such invoices are not valid for obtaining Modvat credit. It was alleged that, the registered dealer was required to issue invoices in the capacity of a first stage dealer, instead of zero stage dealer, because they had purchased goods from the manufacturer namely M/s Manish Metal Processing & Engg. Co. Pvt. Ltd. Jamshedpur (MMPEL) and the registered dealer is not working as a Depot or consignment Agent of M/s MMPEL from whom the registered dealer purchased the goods.
4. This aspect was exhaustively examined by the Commissioner (Appeals) in his order. It is stated that, in terms of the job work agreement between TISCO Jamshedpur and MMPEL, the latter was to carry out the job work entrusted by TISCO. The material for job work was cleared on payment of duty by TISCO to MMPEL. However, in terms of the agreement, the ownership of the goods was to remain with the TISCO Jamshedpur at all times. It was further noted that the material was received from MMPEL by TISCO Chamanpura Ahmedabad and the same was subsequently received by TISCO Aslali Ahmedabad. TISCO Aslali dispatched the material to the respondents. The Commissioner (Appeals) disagreed with the original authority and accepted the claim of the respondents which the revenue has challenged through the instant appeal.
5. The central issue in this case is as to whether or not the invoices issued by M/s TISCO Aslali Ahmedabad, are invalid on account of the fact that the same are issued by the third stage dealer. IN the facts of the case extracted in the order of the Commissioner (Appeals) it has come on record that, M/s MMEPL are only the conversion agents and not the manufacturers of the impugned goods, in terms of the agreement between TISCO Jamshedpur and M/s MMEPL. In that situation M/s TISCO continue to be the owner of the goods manufactured on the job work basis, being the principal manufacturers in the premises of the job workers. In the revenue's appeal these facts have not been controverted. In that situation, the establishments of TISCO at Ahmedabad cannot be treated as dealers with reference to the goods manufactured by TISCO or (MMEPL). In fact the invoices issued by TISCO Depots (though registered as dealers) for effecting inter-depot transfers are merely stock transfer invoices and can not be categorized as Dealer's invoices, because there is no sale by one Depot to another depot. The sale from TISCO to the appellants constitutes the first sale. Hence the establishments of TISCO issuing the inter depot transfer invoices would be categorized as the stockists or Depots and the status of the invoices issued from these establishment would merit categorization as "invoices issued from the Depot of the manufacturer."Therefore there exist no grounds to allege that the said invoices are issued by the third stage dealer as proposed in the show cause notice.
6. Accordingly I hold that, the order passed by Commissioner (Appeals) does not call for any interference and the same is upheld. Consequently the revenue appeal stands rejected.
(Operative part pronounced in court)