Customs, Excise and Gold Tribunal - Mumbai
M/S Bullows Paint Equipment Pvt. Ltd. vs Commissioner Of Central Excise, ... on 14 August, 2001
ORDER J.H. Joglekar, Member (T)
1. On hearing both sides on the stay application, the appeal itself was taken up for hearing on granting the prayer of waiver of pre-deposit as made in the application.
2. The appellants took modvat credit of duty paid on inputs receive against 5 invoices and one B/E. Credits were taken later than six months of the dates of issue of invoices and in the case of the gods imported, on the date on which the B/E was filed and on which the duty was paid. Show cause notice was issued for reversal of the credit so taken. Sub-rule 5 of Rule 57G prescribes a period of six months from the date of issue of invoices etc. as the period in which the credit was to be taken. Before the Deputy Commissioner, the plea was made that the B/E could not be "issued". The Dy. Commissioner did not accept the claim. In fact, he mentioned" the date of issue of B/E as the date of payment of Customs duty. Therefore, contention of the assessee that the Bill of Entry is not issued is misleading..." On his confirming the demand of Rs.68557 and on his imposing penalty, the assessee filed an appeal. The Commissioner (A), relying upon the Tribunal judgment in the case of CCE vs Mysore Lac & Paints Works (1991) (52) ELT 590 upheld the orders and dismissed the appeals. Hence, the present appeal before the Tribunal.
3. I have perused the Tribunal's cited judgment which dealt with the case where incremental credit was taken on finding that short credit has earlier been taken. The Tribunal has observed that there was not time limit set out under the Rules. It is not know why he Id.Commissioner relied upon the judgment, in as much as the time limit had been introduced in the rules subsequently.
4. Rule 57G (3) sets out documents under the which the goods are received as documents entitling the receiving manufacturer to take modvat credit. Sub-rule talks of invoice issued by the manufacturer or by the dealer or by the importer. It also talks of certificates issued by nominated officers of the Customs or of the Excise. It also refers to a triplicate B/E or computer generated duplicate B/E. The phrase "issued" does not qualify the named document viz. Bs./E. There is a good reason for this. A manufacturer would issue an invoice along with physical movement of the goods. In fact Rule 52A makes it obligatory that the goods would be accompanied by invoice signed by the owner of the factory. The invoice issued by dealers would also generally accompany the goods. Generally speaking, the covering documents and the goods would enter the user's factory together. The situation where the B/E. is filed, however, is entirely different. The B/E can be filed when before the ship carrying the goods enters port . The date of filing of the B/E has no relevance to the physical movement of the goods covered thereunder. The Bill of Entry after filing would be assessed. Then, if necessary, on examination of the goods, the duty would be paid and goods would be physically cleared. Where the Customs have certain queries or where the importers have some difficulties in establishing the claim as to the importability of the goods, there would be a period of several weeks before the goods are physically cleared. It may happen that the goods are seized by the Department and in such a situation, the clearance can be effected only after the adjudication is over. Thus where a Bill of Entry is filed there is not certainty that the goods would be received i the users' factory within the period prescribed in sub-rule 5 of Rule 57G which reads as under:-
"Credit shall also not be taken by the manufacturer after siz months of the date of issue of any document specified in sub-rule (3)..."
I, therefore, find that the claim made by Shri Jain that the framers of the rule had deliberately not made the date of issue of the B/E to be the relevant date as correct.
5. Thus the bar imposed would not be attracted where the goods are received under the cover of Bill of Entry. In the present case, the bar would continue to apply as regards t he denial of modvat credit on the invoice. Thus, out of the total denial, the denial of modvat credit to the extent of Rs.1190 would sustain and is upheld. The order of denial of modvat credit amounting to Rs.68,557/- is set aside. Since the penalty was imposed only on this ground, the orders of penalty is also set aside.The appeal is allowed in the above terms.
(Dictated in Court)