TMI Blog2015 (10) TMI 375X X X X Extracts X X X X X X X X Extracts X X X X ..... he manufacturer and also could be transferred by a dealer to a third party. Two endorsements were made permissible on the gate passes - From the aforesaid, it is clear that credit would be given on an invoice bill, which indicates payment of duty on such inputs. In the instant case, the invoice bill was produced, which evidenced payment of excise duty on the inputs received by the applicant. The said bill was endorsed by the manufacturer. The fact that the invoice did not indicate the name of the appellant was only a procedural lapse, which was rectified by the endorsement made by the manufacturer in favour of the applicant. Such endorsement made cannot make the document invalid and, consequently, we are of the opinion that endorsement made by the manufacturer in favour of the applicant on the bills raised by the supplier does not make the invoice invalid and the applicant is entitled to avail MODVAT credit. - credit allowed - Decided in favor of assessee. - Central Excise Reference No. 23 of 2002, Central Excise Reference No. 1 of 2011 - - - Dated:- 29-9-2015 - Hon'ble Tarun Agarwala And Hon'ble Surya Prakash Kesarwani, JJ. ORDER ( Per: Tarun Agarwala, J. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... require that there may be a document showing proof of payment of excise duty and the certificate contained in the invoice was only to show that the inputs are being dispatched to the job worker's factory premises even though the said invoice was in the name of M/s PCT Ltd. for whom the job work was done by the applicant showing proof of the payment of duty, the applicant was entitled for the MODVAT credit? (iv) Whether when the manufacturer is a job worker, the inputs are not being purchased by him and therefore the invoices in respect of the inputs cannot be in his name? (v) Whether in the absence of transfer by title by endorsement in the documents of title, the property in the good is never transferred by the endorser in favour of the endorsee and the Appellate Tribunal was not justified in denying the benefit of MODVAT credit to the applicant on the ground that they were not concerned with the nature of the endorsement made by M/s PCT Ltd.? (vi) Whether there being no sale of the inputs to the applicant by M/s PCT Ltd. or anyone else, there can be no invoice in the name of the applicant hence the applicant was entitled for the benefit of MODVAT credit sinc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in points the real issue and which arises for consideration is, whether endorsed invoices are valid documents for taking MODVAT credit after 1st April, 1994. Accordingly, the question of law is modified accordingly as above. Prior to the issuance of Notification No.15 of 1994 dated 30th March, 1994 gate passes besides bill of entry, AR 1 or any other document as may be prescribed by the Central Board of Excise and Customs were accepted as valid documents under Rule 57G of the Rules for clearing MODVAT credit. The Central Board of Excise and Customs vide circular dated 8th November, 1994 permitted two endorsement on the gate passes as valid documents. Subsequently, vide Notification No.15 of 1994 dated 30th March, 1994 invoices in place of gate passes were prescribed as valid documents along with AR-1 or bill of entry under Rule 57G for availing MODVAT credit. This Notification No.15 of 1994 created difficulties to the genuine end users of the goods where MODVAT credit was being made on the basis of gate passes. In many cases, gate passes were issued prior to 30th March, 1994 but the goods were not received after 30th March, 1994. It was made clear that MODVAT credit could be t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e shall be made out in respect of each such lot. In case a consignment is loaded on more than one vehicle, vessel, pack animal or other means of conveyance which do not travel together but separately or at intervals, a separate invoice shall be made out in respect of each vehicle, vessel, pack animal or other conveyance. (5) Invoice shall be maintained in two sets - (i) one for clearance for home consumption; and (ii) the other for clearances for export. (6) Each invoice shall bear a printed serial. Only one invoice book of each type shall be used by a factory for removal of excisable goods at any one time unless otherwise specially permitted by the [Commissioner] in writing. (7) Each foil of the invoice book shall be authenticated by the owner of or working partner or Managing Director/ Company Secretary, as the case may be, before being brought into use by the manufacturer. The serial number of the invoice, before being brought into use, shall be intimated to the [Assistant Commissioner of Central Excise] and dated acknowledgement of receipt of such intimation shall be retained by the manufacturer. (8) If any person - (a) carried or transports e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... importer registered under Rule 174 and duly authenticated by the proper officer; (i) an invoice issued by an importer from his depot or from the premises of the consignment agent of the said importer provided the said depot or the premises, as the case may be, is registered under Rule 174 and duly authenticated by the proper officer; (j) an invoice issued by a first stage or second stage dealer of imported goods registered under Rule 174 and duty authenticated by the proper officer; (k) duplicate copy of a bill of entry generated on Electronic data Interchange System installed in any Customs or central Excise Commissionerate; (l) a certificate issued by the Superintendent of Central Excise or by the proper officer in the Customs area under Rule 57E; and (m) an invoice issued by a manufacturer of final product under sub-rule (3) of Rule 57F or sub-rule (1) of Rule 57S. Explanation.--For the purposes of this section,-- (i) first stage dealer means a dealer who purchases the goods directly from-- (a) the manufacturer under the cover of an invoice issued under Rule 52A or Rule 100E or from the depot of the said manufacturer or from any other pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt with adequate balance to cover the duty of excise payable on the final products cleared at any time. (8) A manufacturer of final products shall submit within five days after the close of each month to the Superintendent of Central Excise, a monthly return indicating the particulars of the inputs received during the month and the amount of credit taken. The manufacturer shall also submit original duty paying documents and extracts of Part I and Part II of For R.G. 23A maintained along with the monthly return to the Superintendent of Central Excise, who shall after verifying their genuineness, deface such documents and return the same to the manufacturer: Provided that the Commissioner may, having regard to the nature, variety and extent of production or manufacture or frequency of removals-- (i) fix in relation to any assessee or class of assesses a period shorter than one month for filing the aforesaid return; (ii)permit that the aforesaid return may be filed by the assessee within a period not exceeding twenty-one days after the close of each month: Provided further that in respect of a manufacturer availing of any exemption based on the value or quanti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Revenue) New Delhi Subject: Procedural relaxation regarding Modvat Credit. Representations have been received from the manufacturers that some of their inputs on which Modvat credit is taken by them have to be initially sent to another manufacturer (job workers) for part of the process and then return the same to the manufacturers. For this purpose, the manufacturers clear the goods under Rule 57F(1)(ii) on payment of duty. The job workers take the Modvat credit and clear the products manufactured out of said inputs on payment of appropriate amount of duty to the manufacturer who had supplied the inputs to said job workers. It is represented that this procedure entails avoidable expenditure on account of double transportation and material handling, besides loss of time. 2. It has been suggested that to get over the difficulties inherent in the existing procedure, the inputs could move directly from the supplier to the job workers without being routed through them. The inputs could be consigned to the job workers directly on account of such manufacturers as in the case of registered dealers. 3. The matter has been examined. Board has earlier issued the Circu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... element borne by him in respect of the inputs used by him. The object behind Rule 57A read with Rule 57G was utilisation of credit allowed towards payment of duty on any of the final products in relation to manufacture of which such inputs were intended to be used in accordance with the declaration under Rule 57G of the Rules. It was contended that payment of such excise duty must be evidenced by relevant document, which in the instant case was not disputed, inasmuch as the invoice issued by the supplier indicated payment of excise duty. On the other hand, the learned counsel for the department submitted that the provision is mandatory and since correct documents were not filed, the applicant was not entitled to avail MODVAT credit since Rule 57G did not allow endorsed documents to be used for the purpose of availing MODVAT credit. Having heard the learned counsel for the parties, we find that it is not in dispute that the applicant received the goods, which was duty paid. It is also not in dispute that the duty paid goods received by the appellant was processed for the ultimate manufacture of the end product and was given to the manufacturer. The only defect in the process ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed product, provided that the input and the finished product were excisable commodities and fell under any of the specified chapters in the tariff schedule. Under rule 57G, every manufacturer was required to file a declaration before the jurisdictional Assistant Collector, declaring his intention to take Modvat credit after paying duty on the inputs. The object behind rule 57A read with rule 57G and rule 57-I was utilization of credit allowed towards payment of duty on any of the final products in relation to manufacture of which such inputs were intended to be used in accordance with the declaration under rule 57G. Rule 57-I referred to consequences of taking credit wrongly. 10. The object of the Modvat scheme was to reduce cost of final product by taking credit for the duty paid on the inputs. Similarly, the Supreme Court in Madras Cements Ltd. Vs. Commissioner of Central Excise, 2010 (254) ELT 3 held: In order to avail of Modvat/Cenvat credit, an Assessee has to satisfy the Assessing Authorities that the capital goods in the form of component, spares and accessories had been, utilized during the process of manufacture of the finished product. In the light of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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