Customs, Excise and Gold Tribunal - Mumbai
Galaxy Agrico Exports Ltd. vs Commissioner Of Central Excise on 8 July, 2003
Equivalent citations: 2003(160)ELT904(TRI-MUMBAI)
ORDER V.K. Agarwal, Member (T)
1. Shri Paresh Seth, learned advocate submitted that as directed by the Tribunal the appellants M/s. Galaxy Agrico Exports Ltd. have deposited Rs. 20,000/-. He further requested that as the issue involved is very simple one the appeal may also be herd. The learned D.R. does not have any objection. Accordingly, I take up the appeal itself for disposal.
2. The learned advocate submitted that the appellants manufacture spades, shovels etc. out of rerolled material in respect of which they availed of deemed credit under Notification No. 58/97-CE (N.T.) dated 30.08.1997; that the deemed modvat credit has been dis-allowed to them on the ground that the condition specified in paragraph 4 of the Notification has not been satisfied as payment has not been issued in the name of the supplier. He further submitted that paragraph 4 of the notification provides that the provision of notification No. 58/97 shall apply to only those inputs which have been received directly by the manufacturer of the final products from the factory of the manufacturer of the inputs under cover of an invoice declaring that the appropriate duty has been paid on such inputs under the provision of Section 3A of the Central Excise Act; that explanation to notification provides that the payment is to be made directly by the manufacture of the final products to the manufacturer of the said inputs by cheque drawn on his own bank account; that they have made the payment to M/s. Rashtriya Ispat Nigam Ltd. and M/s. Aslo Steel Ltd. as per the direction issued by the supplier of the inputs; that they had produced a certificate also from the supplier of the raw material namely M/s. Five Star Agrico (P) Ltd. to the effect that the payment were received by them from the appellants. finally he relied upon the Board's Circular No. 441/7/99-CX dated 23.2.1999 wherein Board has clarified that the modvat credit should not be denied on the ground of minor procedural lapses. He also mentioned that board has also clarified that the Assistant Commissioner has to ensure that inputs suffered duty and have been used in the process of manufacture before allowing the modvat credit; In the present matter it is not in dispute that inputs has suffered duty and these were utilized in the process of manufacture of final product.
3. Shri H. Kothikar, learned S.D.R., countered the argument by submitting that the condition of the notification requires that invoices should be issued in the name of the supplier of the inputs which has not been done in the present matter and as such the deemed credit can not be taken by them.
4. I have considered the submissions of the both sides. Explanation to notification No. 58/97-CE reads as under:
"For the purpose of this notification, invoice price may be the price charged by the manufacturer of inputs and indicated in the invoice accompanying the said inputs, the payment for which is to be made directly by the manufacturer of the final products to the manufacturer of the said inputs by cheque drawn on his own bank account."
Benefit of deemed credit is being denied only on the ground that the cheque was not drawn in the name of the suppliers of the inputs and the cheques were drawn in the name of M/s. Rashtriya Ispat Nigam Ltd. and M/s. Aslo Steel Ltd. It has been contended by the appellants, which has not been rebutted by the Revenues that the payment by cheque was made by the appellants to M/s. Rashtriya Ispat Nigam Ltd. and M/s. Aslo Steel Ltd. on the direction of the supplier of the inputs. This fact has further been confirmed by the supplier of the inputs by giving a certificate of receipt of the payment. It is also not a case of the Revenue that the inputs were received directly by the appellants from the factory of the supplier on which appropriate duty has been made by the suppliers. In these circumstances, denial of modvat credit to the appellants will not be justified merely on the ground that the cheque were drawn in the name of some other companies on the direction of the suppliers of the inputs. In view of this I hold that the appellants are eligible to the deemed credit.
5. The appeal is thus allowed.
(Pronounced in Court)