1998 (2) TMI 181 - AT - Central Excise

Summary

Issues:
Whether Modvat credit can be allowed for Gate Passes issued after 1st April, 1994, and if Circular No. 76/76/94-CX applies to Gate Passes as valid documents for Modvat credit.

Analysis:
The central issue in this case was whether Modvat credit could be claimed for Gate Passes issued by the supplier after 1st April, 1994. The appellant contended that the benefit of Modvat credit should be allowed based on Circular No. 76/76/94-CX issued by the Central Board of Excise & Customs. The Circular allowed acceptance of "any invoice" or "any documents" as valid documents for Modvat credit under Rule 57G, with a deadline of 31st December, 1994. The appellant argued that Gate Passes issued by a manufacturer should be considered valid documents for Modvat credit if taken before the deadline.

On the other hand, the respondent argued that the Circular only applied to specific invoices issued by manufacturers, depot owners, distributors, or importers, and Gate Passes were not included. The respondent contended that Gate Passes ceased to be valid duty paying documents after 31st March, 1994, and therefore, Modvat credit should not be allowed for them.

The Tribunal analyzed the contentions of both parties and interpreted the Circular. The Tribunal agreed with the appellant's interpretation that the Circular allowed any document issued by a manufacturer to be considered valid for Modvat credit until 31st December, 1994. The Tribunal noted that Gate Passes were valid documents before 1st April, 1994, and during the transitory period, manufacturers might have continued using them unknowingly. Therefore, the Tribunal held that Gate Passes issued by a manufacturer, even after 31st March, 1994, should be considered valid for Modvat credit under the Circular. As a result, the Tribunal allowed the appeal, setting aside the previous order and granting consequential relief to the appellant.