Customs, Excise and Gold Tribunal - Delhi
M/S. S.R.F. Ltd., Bhiwandi vs Cce, Jaipur on 11 January, 2001
Equivalent citations: 2001(136)ELT178(TRI-DEL)
ORDER
P.G.Chacko
1. The appellants are manufacturers of chemicals and are availing the benefit of Modvat credit on eligible inputs used in the manufacture of such chemicals. Sulphuric acid and Low Sulphur Heavy Stock (in short, LSHS) are two of such inputs. In June 1994, they took Modvat credit of the duty paid on sulphuric acid amounting to Rs.6,023.00 and similar credit of the duty paid on LSHS amounting to Rs.37,909.00, totalling to Rs.43,932.00. The Department alleged that the credits were wrongly taken on the strength of invalid documents. The credit on sulphuric acid [manufactured by m/s Hindustan Copper Ltd. and supplied to the appellants by M/s Sunny Trading Corporation, the dealers of the manufacturers] was taken on the strength of endorsed invoices of M/s Hindustan Copper Ltd. as well as invoices issued by the dealer subsequent to delivery of the goods. The Department alleged that neither the endorsed invoices of the input-manufacturer nor the invoices of the dealer were proper and valid duty-paying documents for the purpose of availment of credit under Rule 57G of the Central Excise Rules. The dealer's invoices were held to be inadmissible on the ground that they were issued subsequent to the date on which the inputs were supplied to the appellants and the latter took credit thereon. As regards the Modvat credit on LSHS, the same was taken on the strength of delivery challans issued under Rule 52A by the Indian Oil Corporation [IOC]. The allegation of the Department in this connection was that the documents issued by the IOC were the originals thereof, which were not valid documents for the purpose of taking Modvat credit. According to the Department, only the "duplicate for transporter" copy could be admitted for the purpose. On this basis, the Department by show-cause notice [SCN] directed the appellants to show cause why the Modvat credits should not be disallowed. The appellants contested the proposed action. The dispute was adjudicated by the jurisdictional Assistant Commissioner who, after examining various Notification, upheld the Department's allegations and confirmed the demand of duty of Rs.43,932.00 against the appellants. The appeal filed by the party against the order of the Assistant Commissioner was rejected by the Commissioner (Appeals). Hence the present appeal of the assessees before the Tribunal.
2. I have heard both sides. Ld. Advocate Shri M.P.Devnath for the appellants submits that, before 01.04.1994, Modvat credit on inputs could be validly taken on the strength of original copy [carrier copy] of gate passes issued under Rule 52A of the Central Excise Rules by the input-manufacturers. From 01.04.1994, the corresponding documents are the "duplicate for transporter" copies of invoices issues under Rule 52A (as amended) by the input-manufacturers. Ld. Advocate submits that, for some time during the transitional period, M/s IOC used to issue their invoices in the form of delivery challans under Rule 52A by making use of their old stationery. In other words, the printed format of the "carrier" copy of gate pass was used for the purpose of invoice under Rule 52A for certion period after 01.04.1994. The delivery challans of M/s IOC, on the strength of which Modvat credit was taken by the appellants on LSHS, were issued in June 1994 in this manner. Ld. Counsel submits that such documents were valid duty-paying documents for the purpose of availment of Modvat credit by virtue of decisions of the Tribunal, provisions of Rule 57H of the Central Excise Rules and relevant circulars of the Central Board of Excise and Customs. In this connection, he has relied on the following decisions of the Tribunal:
i. CCE, Chandigarh Vs Ajit Cotton Ginning, P.D.S.R.Mills [1997 (90) E.L.T.332 (T)].
ii. Morton Confectionery & Milk Prod. Factory Vs CCE, Patna [1999 (107) E.L.T.89 (T)].
iii. Finecore Cables (P) Ltd. Vs CCE, Bangalore [1997 (23) RLT 842 (CEGAT)].
On the above basis, ld. Advocate argues that the Modvat credit taken on the strength of the delivery challans of M/s IOC was admissible to the appellants. With regard to the Modvat credit on sulphuric acid, ld. Advocate submits that the said credit was also taken during the transitional period, and, therefore, the invoices issued by the dealer, on the strength of which the credit was taken, were also admissible documents for the purpose of availment of credit by virtue of the Board's Circular No.76/76/94-CX dated 08.11.1994. He submits that, under Notification No.15/94-CE(NT), M/s Sunny Trading Co. were eligible to issue invoices as unregistered dealer and that as per the Board's Circular, any invoice/document issued by such dealers was a valid document for the purpose of allowing Modvat credit for the transitional period upto 31st December 1994. The requirement of registration of the dealer, Counsel submits, was only consequent to Notification No.32/94-CE(NT) dated 04.07.1994. But the Modvat credit in question was taken before 04.07.1994. Therefore, according to ld. Advocate, there was no legal hitch in taking credit on the strength of the invoices issued by M/s Sunny Trading Co. Ld. Advocate has also relied on the Tribunal's decision in the case of Collector of Central Excise & Customs Vs Amal Rasayan Ltd [1993 (68) E.L.T.446] in support of his submission that it was not necessary that the inputs supplied by the dealer should be accompanied by his invoice. According to him, the invoice could be issued subsequently also. In this context, ld. Advocate has also relied on the decision of the Tribunal in Garha Gears Ltd. Vs CCE, Indore [2000 (37) LT 770 (CEGAT)]. Ld. Advocate, therefore, prays for allowing Modvat credit on sulphuric acid on the strength of the endorsed invoices of M/s Hindustan Copper Ltd. and the dealer's invoices issued subsequently.
3. Ld. JDR Shri S.C.Pushkarna has opposed the above arguments. He submits that M/s IOC, in fact, issued the "carrier" copy of the erstwhile gate pass, which was not a valid document for availment of Modvat credit after 01.04.1994. The "carrier" copy of gate pass was the original copy. After 01.04.1994, Modvat credit is not admissible on any original copy. The valid document for availment of Modvat credit after 01.04.1994 is the duplicate copy of invoice. Since the documents under reference were issued in the format of carrier copy (original copy) of gate pass, the same would not be admissible for availment of Modvat credit on inputs in June 1994. As regards the Modvat credit taken on sulphuric acid by the appellants, ld. JDR submits that such credit was taken on the strength of two types of documents. One of them was endorsed invoices of M/s Hindustan Copper Ltd. and the other was invoices issued by the dealer subsequent to the date on which the credit was taken. Ld. JDR submits that endorsed invoices are not valid duty-paying documents for the purpose of availment of Modvat credit as held by the Tribunal's Larger Bench in the case of Balmer Lawrie & Co. Ltd & Ors. Vs Commr. of Central Excise, Kanpur & Ors. [2000 (36) RLT 666]. On the admissibility of dealer's invoices, ld. DR submits that the said invoices were issued subsequent to the date on which the credit was taken. In other words, as on the date of taking credit, those invoices did not exist. In this view of the matter, according to ld. DR, the entire credit taken on sulphuric acid is not available to the appellants. He, therefore, prays for rejecting the appeal.
4. I have carefully examined the rival submissions. On the issue whether the credit taken on LSHS was admissible to the appellants, I find, the credit was taken on delivery challans issued by the input-manufacturers namely M/s IOC under Rule 52A. Those delivery challans were issued in the format of the erstwhile gate pass (carrier copy). It is true that a carrier copy of gate pass was the proper document to be used for the purpose of availment of inputs-credit before 01.04.1994. After 01.04.1994, no such gate pass is valid for any purpose whatsoever. In the instant case, the document issued by M/s IOC was a delivery challan and not a gate pass though it was in the format of the erstwhile gate pass. The document was issued after 01.04.1994. After 01.04.1994, the proper document for the purpose of availment of Modvat credit is the "transporter" copy of invoice issued under Rule 52A (as amended). In other words, the "transporter" copy of invoice issued after 01.04.1994 corresponds to the "carrier" copy of gate pass issued before 01.04.1994. For this reason, the document issued by M/s IOC on the format of "carrier" copy of gate pass should be accepted as valid duty-paying document for the purpose of availment of Modvat credit by virtue of decisions of the Tribunal and Board's Circular aforesaid as well as the provisions of Rule 57H of the Central Excise Rules. In the cited case of Morton Confectionery [supra], the Tribunal held a "carrier" copy of invoice to be the same as "transporter" copy. In the cited case of Ajit Cotton [supra], the Tribunal held that invoice-cum-challans issued by M/s IOC were valid duty-paying documents for availing Modvat credit under Rule 57G. Therefore, the Modvat credit taken by the appellants on the strength of delivery challans of M/s IOC is available to them.
5. As regards the credit taken on sulphuric acid, I find that the position is quite different. As rightly pointed out by ld. JDR, endorsed invoices issued after 01.04.1994 are not valid duty-paying documents for the purpose of availment of inputs-credit as held by the Tribunal's Larger Bench in the case of Balmer Lawrie & Co [supra]. The invoices issued by the dealer subsequent to the date on which the credit was taken also cannot be acceptable documents for the simple reason that those invoices were not in existence at the time of taking of the credit. This view can claim support from the decision of the Tribunal in the case of Amal Rasayan Ltd [supra] cited by ld. Advocate. The Tribunal in that case, referring to a Circular of the Board, observed that suitable entries could be made in RG-23A Pt.II register relating to inputs even before the documents were received, but any Modvat credit on the inputs could not be allowed before receipt of the duty-paying documents. In the instant case, credit on sulphuric acid was taken before receipt of dealer's invoices. Therefore, the appellants are not entitled to Modvat credit on sulphuric acid.
6. In view of the above, the impugned order of the Commissioner (Appeals) is upheld only to the limited extent to which the order denied Modvat credit on sulphuric acid. As regards denial of Modvat credit on LSHS, the impugned order stands set aside. The appeal stands allowed in part.
(Dictated and pronounced in the open Court.)