Customs, Excise and Gold Tribunal - Delhi
Century N.F. Casting vs Cce on 2 April, 2004
Equivalent citations: 2004(95)ECC261, 2004(175)ELT466(TRI-DEL)
ORDER V.K. Agrawal, Member (T)
1. In these two appeals filed by M/s. Century N F casting, the issue involved is whether the Modvat credit can be availed of on the basis of declaration made on the Bill of Entry in the Customs House itself for transferring the goods to the Appellants by the importer.
2. Shri K.K. Anand, learned Advocate submitted that the Appellants manufacture Aluminum alloy; that the principal raw material is aluminium scrap, which was purchased by them during the relevant period from M/s. Multi Metal Udyog, a dealer registered with Central Excise department; that M/s. Multi Metal Udyog had imported Aluminium scrap at Internal Container Depot at Ballabgarh; that the dealer gave a declaration to the Customs Authority that the entire material had been sold to the appellants; that accordingly Appraiser of Customs made the endorsement that the entire quantity of material has been sold/transferred to the Appellants; that the Appraiser of the Customs made the endorsement on the Bill of Entry to the effect that entire quantity of material sold/transferred to the Appellants against transporters GR No., and date, that the goods were despatched directly from the ICD to their factory under triplicate copy of Bill of Entry and invoices issued by M/s. Multi Metal Udyog, that the invoices were marked "non-modvatable" in view of the fact that triplicate copy of Bill of Entry, duly endorsed by the proper officer of the Customs, was to be used for availing Modvat credit in terms of Board's Circular No. 96/7/95 CX dated 13.2.95; that the Department has disallowed the Modvat credit and imposed penalty on the ground that Modvat credit cannot be availed on the basis of endorsed Bill of Entry. The learned Advocate, further, submitted that the Modvat credit can be availed of on the strength of endorsed Bill of Entry that it has been clarified by the Board in Circular No. 96/7/95 CX dated 13.2.95 that where an entire consignment is sold out from the dock, the triplicate copy of Bill of Entry duly signed and stamped by the proper officer of Customs can be used for the purpose of availing Modvat credit by the user; that the Circular further mentions that in such a situation, the proper officer will also endorse/attest the duplicate and triplicate copies of Bill of Entry giving therein details of the consignee and the triplicate copy of the Bill of Entry will also serve as a covering/transport document; that the Board again vide Circular No. 1/79/13/96 CX dated 29.2.96 has clarified that whether the imported goods are in Customs dock area and the manufacturer/importer decides to divert the goods, a declaration by the importer can be made on the reverse of the triplicate copy of the Bill of Entry that the consignments are being delivered to the unit (name of the unit) for availing the credit and endorsed by the proper officer of the Customs for enabling the manufacturing unit to avail the credit; that further, the Commissioner of Customs (Imports), Mumbai, under Public Notice No. 19/2000 dated 11.2.2000 clarified that where an entire consignment is still in docks, is transferred to a manufacturer directly from the docks, modvat credit would be available provided declaration and endorsement by the dock Appraiser is made on the duplicate copy of Bill of Entry and generated at EDI system. The learned Advocate contended that this shows that the instructions of the Board relating to availability of Modvat credit on endorsed Bill of Entry contained in Circulars dated 13.2.95 and 29.2.96 are still in force. Finally, he relied upon the decision in the case of CCE Chandigarh v. JCT Ltd., 2003 (151) ELT 508 (P&H) wherein Punjab and Haryana High Court has held that triplicate copy of Bill of Entry endorsed by the importer in favour of the assessee would be a valid duty paying document (after referring to paragraph 4 of the Circular dated 28.2.96). Reliance has also been placed on the decision in the case of CCE Tricky v. Tricky Steel Rolling Mills, 2002 (48) RLT 839 CEGAT and CCE, Jamshedpur v. TISCO, 2001 (137) ELT 562 (Tri).
3. Countering the argument Ms. Charul Barnwal, learned Senior Departmental Representative, submitted that under the provisions of Rule 57 G of the Central Excise Rules, 1944 Modvat credit can be availed of if the inputs are received in the factory accompanied with specific duty paying documents; that endorsed Bill of Entry is not a specified documents evidencing payment of duty; that M/s. Multi Metal Udyog, who were the registered dealer for supply of impugned material, has issued the invoice which clearly bear the stamp "non-modvatable"; that invoices issued by the Registered dealer is the specific document which is a non-modvatable invoice and as such the Appellants could not have taken the Modvat credit; that Notification No. 14/96 Central Excise NT dated 23.7.96 has amended Rule 57G and therefore, the instructions issued earlier would not be applicable to the amended Rule. She relied upon the decision in the case of Tata Iron and Steel Co. Ltd. v. CCE, Jamshedpur, 2001 (137) ELT 761 (Tri) wherein the Modvat credit was held not to be available in respect of endorsed Bill of Entry.
4. We have considered the submissions of both the sides. The facts which are not in dispute are that M/s. Multi Metal Udyog, who are registered as a dealer with Central Excise department, have imported aluminium scrap which was transferred by them directly from docks to the premises of the Appellants under the cover of triplicate copy of Bill of Entry which was earlier endorsed by the Appraiser of Customs to the effect that the entire quantity has been transferred by the importer to the Appellants under transporters GR. The only issued to be decided is whether the Appellants are eligible to avail of the Modvat credit on the basis of such a Bill of Entry. Learned Advocate has shown us the photocopy of the Bill of Entry which contains such an endorsement duly signed by the appraiser of Customs. The issue in our opinion is not open to the Department to disallow the credit on this ground as the Board vide Circular No. 9/7/95 CX dated 13.2.95 has provided this facility in a very specific term. As per Para 3 of the said Circular wherein an entire quantity is sold out from the docks, the triplicate copy of the Bill of Entry duly signed and stamped by an proper officer of the Customs can be used for the purpose of availing the Modvat by the user. It is not the case of the Department that the Bill of Entry has not been duly signed and stamped by the proper officer of the Customs. There is no force in the submissions of the learned Senior Departmental Representative that the substitution of Rule 57G by the Notification No. 14/96-CE(NT), these circulars have become inoperative. The amendment has only mentioned the duty paid documents on the basis of which Modvat credit could be taken. Further by the amendment ten documents were specified for the purpose of availing the Modvat credit and one of them was 'triplicate copy of Bill of Entry' which was one of the duty paying document even before the substitution of Rule 57G by Notification No. 14/96(NT). We, therefore hold that the Circular No. 96/7/95 CX dated 13.2.95 is squarely applicable even after the issue of Notification No. 14/96(NT). Moreover, the learned Advocate was brought on records Public Notice No. 19/2000 dated 11.2.2000 issued by the Commissioner of Customs (Import), Mumbai wherein the following has been clarified:
"It is clarified that where the imported goods were still in Docks and the manufacturer/importer decides to divert/transfer the entire consignments a declaration by the manufacturer/importer can be made on the reverse of duplicate copy of Bill of Entry generated on the EDI system by the manufacturer/importer that the entire consignments are being delivered to the manufacturing unit (name of the unit) for availing credit. The same shall be accordingly endorsed by the Docks Appraiser for enabling the manufacturing unit to avail the credit.
However, no separate Certificate would be issued in these cases. Central Excise authorities would give the Modvat Credit on the basis of endorsement made by the Appraiser (Docks) with proper stamp."
In view of this Circular, the Department cannot take a stand that the Modvat credit is not available to the Appellants as this Circular in fact only mentions that already has been clarified by the Board in Circular dated 13.2.95. Further the decision relied upon the learned Advocate also supports the view taken by us. The decision in the case of Tata Iron and Steel Company Ltd., 2001 (137) ELT 761 is not applicable as it is not clear as to who had endorsed the Bill of Entry in the said matter. Secondly the Board's Circular were not brought to the notice of the Bench deciding the Appeal. Accordingly, we set aside the impugned order and allow both the appeals.