TMI Blog2010 (4) TMI 778X X X X Extracts X X X X X X X X Extracts X X X X ..... Devani, JJ. REPRESENTED BY : Shri R.M. Chhaya, SSC, for the Appellant. M/s. Nanavati Associates, for the Respondent. [Judgment per : H.N. Devani, J. (Oral)]. In both these appeals, the appellant-Revenue has challenged the order dated 21-11-2007 made by the Customs, Excise Service Tax Appellate Tribunal (the Tribunal) [2008 (222) E.L.T. 154 (Tri. - Ahmd.)], proposing the following three questions : [i] Whether, in the facts and circumstances of the case, the judgment rendered by the Hon ble Tribunal, absolving the respondent from fraudulent clearance in view of the provisions of Rule 3(1) of CENVAT Credit Rules, 2002 and Rule 57AE(3) of the Central Excise Rules, 1944 (as applicable), is correct or not? [ii] Whether, in the facts and circumstances of the case, in view of the provision of Rule 3(1) of CENVAT Credit Rules, 2002 and Rule 57AE(3) of the Central Excise Rules, 1944 (as applicable), if the conditions are not fulfilled, can the benefit of credit be granted terming it as technical ground, as held by the Hon ble Tribunal? [iii] Whether, in the facts and circumstances of the case, the Hon ble CESTAT is correct in coming to the conclusion that even t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lls of entry were assessed, and duplicate and quadruplicate copies of the bills of entry were returned to the respondent in the month of January 2004. Thereafter, the respondent vide communication dated 16th March, 2004, informed the concerned Assistant Commissioner that the CENVAT credit had been taken in respect of 1,66,505 MTs of Iron Ore Pellets imported through the bills of entry. 5. In the aforesaid background, a show cause notice dated 2nd March, 2005 came to be issued against the respondent seeking to disallow CENVAT credit of duty availed by it on the strength of twelve assessed bills of entry, bills of entry which were pending assessment against TR-6 challans of payment of CVD for which bills of entry were accepted by the Revenue after the Settlement Commission s order and assessed thereafter. The main grounds stated in the notice were that the assessee did not maintain proper records as required under Rule 57AE(3) of the erstwhile Central Excise Rules, 1944, Rule 7 of Cenvat Credit Rules, 2001 and Rule 7 of the Cenvat Credit Rules, 2002, showing the actual date of receipt, disposal, consumption and inventory in respect of the said imported iron ore pellets during the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal, on behalf of the respondents it had been contended that insofar as fourteen bills of entry were concerned, CENVAT credit was availed on the strength of such bills and as such could not be denied to them, the customs authorities upon detection of offence did not allow them to file the balance three Bills of Entry and the said bills were assessed and copies were given only after settlement of dispute before the Settlement Commission; there was nothing recorded in the order of the Settlement Commission about fraud, wilful mis-statement with intent to evade payment of duty; that as they had paid the duty, the substantive benefit should not be denied to them on technical objections. 10. The Tribunal after considering the submissions advanced on behalf of the respective parties and after appreciating the evidence on record has recorded that the dispute which related to clearance of goods without payment of duty and without obtaining out of charge was settled by the respondents before the Settlement Commission vide order dated 16-10-2003. The Tribunal has observed that the Commissioner had agreed that bills of entry cannot be considered to be supplementary invoices as there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Tribunal was also of the view that the respondents having cleared the goods from their captive jetty without completing customs formalities, they could be penalized in respect of the same, but Modvat credit of duty paid by them (may be subsequently in terms of the order of the Settlement Commission) cannot be disallowed. The Tribunal further held that the Settlement Commission had not imposed any penalty for the alleged offence of clearance of goods without filing bills of entry; that bills of entry are prescribed documents for the purpose of availment of credit in terms of Modvat Rules and when the same have been assessed and the duty has been paid, the respondents cannot be deprived of their right to avail the credit of the same; that even in respect of balance bills of entry, duty was paid by the respondents while awaiting assessment and credit availed on the basis of TR-6 challans, which in any case is also a prescribed document in terms of Rule 57AE(3) of the erstwhile Central Excise Rules, 1944 and Rule 7(1)(b) of the Cenvat Credit Rules, 2001. 12. The Tribunal was of the view that the three bills of entry could not be filed by the respondents on account of resistance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal has noted that with effect from 1-7-2000, all statutory records had been dispensed with and that only private records were required to be maintained. The Tribunal further noticed that in Show Cause Notice F.No. VIII/10-83/COMMR/2001, dated 24-7-2001 in the customs proceedings, the Department had agreed to the fact that due records had been maintained by the respondent. The Tribunal was, accordingly, of the view that on the basis of the aforesaid findings, the denial of credit was not substantiated by any evidence and was against the facts recorded in another show cause notice, and accordingly, allowed the appeals and granted consequential relief to the respondents. 15. From the facts noted hereinabove, it is apparent that the main contention of the appellant Revenue is that the respondent has not complied with the directions issued by the Settlement Commission in its true spirit. That despite the Settlement Commission having directed that the Jurisdictional Commissioner shall have to take a view on the admissibility of the CENVAT credit, yet the respondents assessees had on their own availed the credit. However, it is an undisputed position that the respondents have paid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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