Customs, Excise and Gold Tribunal - Delhi
Cce vs Wearwell Tyre And Tube Industries (P) ... on 24 April, 2002
Equivalent citations: 2002(83)ECC826, 2002(148)ELT457(TRI-DEL)
ORDER K.K. Bhatia, Member (T)
1. The respondents manufacture Tyre of Motor Vehicles falling under chapter heading No. 40.11. They also availed the modvat credit on the inputs under Rule 57A of Central Excise Rules, 1944. They were issued a show cause notice dated 10.6.94 by the Assistant Commissioner of Central excise, Bhopal in which it was alleged that they had availed the modvat credit amounting to Rs. 41,912.15 against the GP-1 No. 405 dt. 2.7.91 which was endorsed for more than two times. Accordingly, they were called upon to show cause why the modvat credit of the aforesaid amount should not be disallowed under Rule 57I of Central Excise Rules, 1944 and why a penalty should not be imposed on them under Rule 173Q of Central Excise Rules. 1944. On considering the reply of the party, the Assistant Commissioner dropped the proceedings initiated against the party.
2. The above order of the Asstt. Commissioner was reviewed and an appeal filed by the department before the Commissioner (Appeals), Bhopal. The Commissioner (Appeals), Bhopal vide his order dated 4.1.2001 rejected the appeal of the Revenue upholding the order passed by the Assistant Commissioner.
3. This Revenue appeal is against the Commissioner (Appeals). I have heard Shri A.S. Bedi, SDR for the appellant and Shri S.K. Bansal, Chartered Accountant for the respondents, i have considered the submissions made before me. In the Revenue appeal, it is contended that in allowing the modvat credit on the strength of three endorsed GP-1, the lower authorities have relied on the decision of the CEGAT in the case of SBS Organics (P) Limited v. CCE , wherein three endorsements were permitted. It is further contended that the CBEC vide Circular No. 22/90-CX.8 dated 9.4.90 have advised that the CEGAT's decision in M/s. SBS Organics (P) Limited may be considered as an exception and it should not be made applicable to any other case for grant of modvat credit on the gate passes which have been endorsed more than two times. It is further contended that the Tribunal in another decisions in the case of CCE, Pune v. U.S.Vitamins (India) Limited has held that the modvat credit cannot be allowed, when mandatory provision of two endorsements are not complied with. The Ld. Consultant for the respondents on the other hand relies on another decision of the Tribunal in Lakhanpal National Limited v. CCE in which a view is taken in favour of the assessee on the issue of availability of the modvat credit on thrice endorsed gate passes. On considering all the arguments advanced before me, it is observed that there are different decisions on the issue whether the modvat credit on the gate passes endorsed more than two times would be admissible or not. However, on the facts of the present case, the merit of the same need not be examined in details. The Id. Consultant for the respondents submits that in this case the GP-1 is endorsed only twice and not three times as perceived in the preceding order. This submission is supported by the facts enumerated in the Order-in-Original. In this case, the GP-1 No. 405 dated 2.7.91 was issued by manufacturer M/s. IPCL to their godown at Thane; from their godown at Thane M/s. IPCL issued the goods under this gate pass to M/s. Hind Rubber after endorsing GP-1 in favour of this party. After this, M/s. Hind Rubber sold the entire consignment to the respondents after endorsing the GP-1 in favour of the head office of the respondents. The head office thereafter endorsed the GP-1 to the factory of the respondents at Betul. In this case the fact is that the GP-1 is endorsed only twice i.e. once by the godown of M/s. IPCL in favour of M/s. Hind Rubber and the second time by M/s. Hind Rubber in favour of the head office of the respondents. The endorsement by the head office to their factory at Betul cannot be considered to be the type of endorsement as to be reckoned third endorsement since the credit on this GP-1 should have been available at the factory of the appellant even without endorsement by the head office. In this view of the matter, the Revenue appeal is misplaced and is accordingly dismissed.