Customs, Excise and Gold Tribunal - Bangalore
Bhuwalka Steel Industries Ltd., ... vs The Commissioner Of Central Excise, ... on 23 October, 2001
JUDGMENT
S.S. Sekhon
1. This appeal has been filed by a manufacture who was availing modvat credit. They purchased a steel misroll from M/s Shri Bahubali Ispat, Bangalore, a dealer, and on the basis of the invoices issued, they took modvat credit of Rs. 14,731/- in terms of the Modvat Rules as the seller was registered in terms of Rule 57GG. However, subsequently it was detected by the Revenue that the seller have issued these invoices on the basis of the invoices of one M/s Sheetal Enterprises, another dealer whose Central Excise Registration Certificate issued in terms of Rules 57GG had been cancelled for want of a storage premises and the premises where they were registered was only a business premises and they did not have a godown at all. The proceedings were initiated against the present appellant to deny the credit of this 'second stage dealer' invoices issued.
2. After hearing both sides it is found:-
a) There is no evidence on record that the second stage dealer knew on the date he issued the invoices that the first stage dealer's registration has been cancelled; the order of cancellation of first stage dealer is dated 16.5.1996 and the invoices have been issued and credit obtained by 31.5.1996 by the appellant. In absence of any evidence and the requirement of Central Excise laws under Section 37C that service of the order would be SERVED/ communicated from the date of issue of registered acknowledgement due and not merely from the date of issuing the order by registered letter, the date of acknowledgement of the Registration Cancellation order i.e, its service, on the recipient would be relevant for them being communicated the order. Since no evidence is coming forth that the order was communicated especially to the 'second stage dealer' by the date they had issued these invoices, the order of the Commissioner (Appeals), is found to be based on presumptions and assumptions and such an order cannot be upheld.
b) Tribunal in a series of cases has upheld that the presence of a godown, by the dealer is not a necessity, infact instructions and trade notices that the ownership of godown with a registered dealer is not a requirement envisaged and a dealer's registration under 57GG were issued. Therefore, I do not find any reasons for the cancellation of the registration of the first stage dealer as in this case to be valid. However, the first dealer is not before me in the appeal. This cancellation of the registration therefore of the 'first stage dealer' on an invalid reason, does not enthuse me to deny the modvat credit of Rs. 14,731/- obtained on invoices of Second Stage Dealer in this case.
3. I would therefore set aside the order, allow the appeal with consequential benefits.
(Pronounced in open Court on 23/10/012.)