Customs, Excise and Gold Tribunal - Delhi
Collector Of C. Ex. vs Sterling Steels And Wires Ltd. on 28 April, 1998
Equivalent citations: 1998(104)ELT357(TRI-DEL)
ORDER P.C. Jain, Member (T)
1. The short question involved in this matter is whether the consignment of wire rods which the respondents herein had obtained from the open market without the cover of a gate pass would be entitled to the benefit of exemption under Notification No. 202/88. It is stated that in all other cases they had been availing the benefit of Modvat Scheme in respect of duty paid wire rods received by them under cover of gate passes and utilised in manufacture of their final product steel wire. There is no dispute that proper accounts for availment of benefit of Modvat credit Scheme in respect of duty paid wire rods received by them and steel wire manufactured out of steel rods were duly kept by them. Department's objection for denying the benefit of exemption under Notification No. 102/88 is that the respondents herein did not keep a separate record in respect of wire rods purchased by them from the open market and utilised by them in manufacture of steel wires and cleared without payment of duty for which they had filed refund claim subsequently.
2. As against the aforesaid, respondents' case is that it is admitted by the Revenue that separate records were being maintained by the respondents in respect of duty paid wire rods received by them for availing Modvat credit and utilised in the manufacture of steel wire. Therefore, by the process of elimination, since no entry relating to this particular consignment was mentioned in the records pertaining to the Modvat Scheme, the respondents submit separate records should be deemed to have been maintained for this particular consignment.
3. We have carefully considered the pleas advanced by both sides. The aforesaid argument of the respondent in our view is not correct. Separate records are required to be maintained for inputs which are required to avail Modvat Scheme and for inputs which are required for availing exemption in terms of Notification No. 202/88. Unless separate records are maintained it will be difficult for the Department to segregate the inputs and accounts for the purpose of proper checking and verification. Otherwise, it will create a total chaos in proper checking. Maintenance of separate records is a positive act. Merely because an entry of inputs received from open market has not been made in Modvat records, it does not imply that separate record for such input has been maintained. Lack of record is not maintenance of record.
4. Ld. Counsel further submits for the respondents that a substantive benefit should not denied merely for a procedural lapse. We do not agree with this submission. Maintenance of separate records for simultaneous availment of Modvat scheme and exemption for the same input and final product is very important, particularly when the procedure has been prescribed by the Department in Trade Notice No. 85-C.E./88, dated 8-9-1988. When the procedure is prescribed they are required to follow the procedure in the peculiar facts and circumstances of this case. At this stage ld. Advocate submits that he could prepare a separate record on the basis of entries in daily journal etc. if the Department is so insistent upon separate records. This plea is not acceptable to us at this stage. Accordingly, we allow the appeal of the Revenue and set aside the impugned order.