Customs, Excise and Gold Tribunal - Bangalore
M/S Cmc Commutator Pvt. Ltd., Belgaum vs The Commissioner Of Central Excise, ... on 3 August, 2001
ORDER Shri Brahama Deva, Member (J)
1. These are two appeals filed by M/s CMC Commutator Pvt. Ltd with reference to the respective impugned orders passed by the lower authorities.
2. When these two matters were called, none appeared on behalf of the appellants. However they filed written submissions requesting to decide the case on merits. Accordingly I proceed to pass this common order on hearing Shri Thomas George, learned Departmental Representative for the Revenue.
3. In Appeal No 1010/97 two issues are involved. Goods were seized and ordered for confiscation for not accounting goods in RG-1 Register. According to the Department, 50 commutators are liable for confiscation in as much as they were ready for dispatch. The Commissioner (Appeals) in the impugned order has observed that in all probability the goods could have been cleared without payment of duty as these goods were not at all entered in the RG-1. The appellants were statutorily bound to enter finished goods in their RG-1 Register which they have failed proving beyond doubt that all the goods including the 50 commutators were liable to confiscation. It was the contention of the party that since the gods have not been finally inspected and accordingly it could not be entered in RG-1 Register. It was submitted in the written submissions that goods are not liable for confiscation as there was neither allegation nor evidence to show there was an attempt to remove the goods without payment of duty. Party also relied upon the decision of the Tribunal in the case of Shantivart & Sons Pvt Ltd Vs Commissioner of Central Excise, Kanpur reported in 1998 (99) ELT 153. It was also submitted that penalty was also imposed in addition to redemption fine and since they paid the penalty, there is no justification for imposition of both fine and penalty.
4. With reference to the first issue in Appeal No 1010/97, Departmental Representative justified the action of the Department in ordering for confiscation relying upon the decision of the Tribunal in the case of Commissioner of Central Excise, Delhi Vs. Universal Auto Products Ltd. reported in 2001 (128) ELT 470.
5. On a careful consideration of the submissions made by both sides with reference to the issue whether goods found in factory but not accounted in RG-1 are liable for confiscation, I find that there is some force in the arguments advanced on behalf of the assessee that goods are not liable for confiscation since department had not adduced any evidence to show there was an attempt to removal of the goods without payment of duty. Relying upon the series of decisions including decisions of the Tribunal referred to by the party, I hold that the goods in the facts and circumstances are not liable for confiscation. Imposition of the penalty is justified. Accordingly the appellants succeed on the first issue.
6. The second issue relates to denial of MODVAT credit. The MODVAT credit has been denied in respect of invoice issued in March 1994. It was the contention of the party that they availed MODVAT credit on gate pass issued in March 1994 with co-relating invoices. Since the transaction was int he transitionary period in March-April 1994 and in view of the Circulars issued by the Board, there was no justification for denying the MODVAT credit They also relied upon the decision of the Tribunal in the case of Collector Vs Haryana Leather Chemicals Ltd reported in 1999 (107) ELT 444. On the other hand, it was argued by the Revenue that it was not a procedural irregularity but a failure in substantial compliance and accordingly the Department was justified in disallowing the MODVAT credit and in support of this contention the Departmental Representative also relied upon the decision of Balmer Lawrie & Co. Ltd. Vs Commissioner of Central Excise, Kanpur reported in 2000 (116) ELT 364.
7. The Appeal No 1011/97 is also related to disallowance of Modvat credit. Modvat credit has been denied on the ground that the party availed credit on invoice dated 19.4.94 issued by importer but the same has been issued from the office address whereas the goods have moved out from their godwon at Purna Village in Thana Dist. It was the contention of the party that the Bill of Entry bears godown address as the Import and Export Code Number and Registration is done at the godown where imported goods are imported and then sold tot he Customers. It was also submitted that invoice was issued in April 1994 when the new invoice procedure was just introduced and during the 1994 various clarifications were also issued in regard to issue of invoices. It was also contended that since the goods are duty paid and procedural lapse if any should not come in the way of denial of substantial justice. They also relied upon various decisions of the Tribunal in support of their contention.
8. On the other hand, Shri Thomas George appearing for the Revenue submitted that in view of the Notification No 15/94 as well as amendment to Section 52A, no excisable goods shall be delivered from a factory or warehouse except under an invoice signed by the owner of the factory or his authorized agent and document prescribed under rule as per Notification No 15/94 is only invoice issued by an importer from his godown. Since this has not been done and utterly a failure in substantial compliance there was no justification for availing modvat credit based upon such a irregular invoice relying upon the decision of the Tribunal in the case of Commissioner of Central Excise, New Delhi Vs. AVS Electronic Pvt. Ltd. reported in 2000 (117) ELT 571.
9. I have carefully examined the submissions made by both sides with reference to the modvat credit in both the appeals. I find that much water has flown since passing of the order by authorities below by developing the case law on the point at issue. The Tribunal has been consistently taking the view that procedural lapse if any should not come in the way of denial of substantial justice, particularly in the transition period. I am of the view that issue with reference to the modvat credit required to be examined by lower authority with reference to the facts and developed case law on the point at issue. In the view I have taken, I am remanding the matter on the limited issue in both the appeals to the jurisdictional adjudicating authority to examine the issue of the modvat credit afresh and to pass an order accordingly on providign an opportunity to the party.
10. Thus these two appeals are disposed off in the above terms.
(Pronounced in the court on 3/8/01)