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M/s Indian Oil Corporation Ltd., Bharat Petroleum Corpn. Ltd Versus Commissioner of Central Excise, Kolkata-VI And VII

2016 (2) TMI 359 - CESTAT KOLKATA

Cenvat Credit - duty paying document - endorsed Bill of Entry - Extended period of limitation - Held that:- credit taken on the basis of endorsed bills of entry was correctly taken by the appellants. So for as the applicability of extended period is concerned it is observed that appellants were taking credit on the basis of documents which were submitted to the department for defacement. In the light of existing factual matrix it can not be said that there was any intention on the part of the ap .....

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Shri R Raghavan & Miss Satabdi Chatterjee Advs. for BPCL For the Respondent : Shri S Sharma, Commr (AR) ORDER Per H. K. Thakur Appeals No. E/154/2010 & E/155/2010 have been filed by appellant M/s. Indian Oil Corporation Ltd against OIO No 03/CE/Commr/Kol-VI/2009 dt 15/12/2009 & OIO No. 02/CE/Commr/Kol-VI/2009 dt 30/11/2009 respectively passed by Commissioner of Central Excise Kolkata-VI Commissionerate as Adjudicating authority. Appeal No. E/147/09 has been filed by the appellant M/ .....

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ved in the present proceeding is taking of cenvat credit on the basis of endorsed bills of entry. Learned Advocate Submitted that Indian Oil Blending Ltd [IOBL] was a 100% subsidiary of IOC until the merger of the former with IOC on 10/05/2006 in accordance with the provisions of the Companies Act 1956. That appellant IOCL procured inputs Additives from both indigenous & imported Sources. That imported additives are imported & controlled by IOCL head office in Mumbai and bills of entry a .....

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- 57 G of Central Excise Rules 1944, Rule-7 of Cenvat Credit Rules 2001/02 & the existing Rule- 9 of the Cenvat Credit Rules 2004 the prescribed document for taking Modvot/ Cenvat Credit is a "bill of entry /triplicate copy of bill of entry". That a ' bill of entry /triplicate copy of 'bill of entry' remains a bill of entry even after endorsements thereof. That endorsement on the bills of entry is only an identification of the person who has procured / purchased the inp .....

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That the main cenvat credit Rules put no condition that after endorsement of a bill of entry it stops being a bill of entry. That as per CBEC Circular No. 276/109/96 Cx dt 26/11/1996 it has been clarified that for availing such credit the earlier procedure prescribed under CBEC Circular No. 179/13/96- cx dt 20/2/1996 can be, mutatis mutandis, followed. It was strongly argued by the Learned Advocate that each & every consignment imported by IOCL, before merger, was duty endorsed in favour of .....

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de the basis for denying cevat credit. He relied upon the following case laws:- (i) CCE. Vs Pepsi foods Ltd [2010(254)ELT 284 (P&H)] (ii) Vimal Enterprise vs UOI [2006(195) ELT 267 (Guj)] 2.1 Learned Advocate further argued that after September 1996 requirement of endorsed of bill of entry was done away with and also there was no power with CBEC to prescribe any other document for taking cenvat credit. That by such amendments carried out w.e.f 1/9/1996 Revenue itself is of the opinion that t .....

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even no endorsement on the B/E & still it was held that credit is admissible. That larger Bench CESTAT judgment, in the case of Balmer lawrie & Co. Ltd vs CCE Kanpur [2000 (116) ELT 364 (T)], is not applicable to the present proceedings as the same is misplaced as per the order of Bombay high court in Maramgoa Steel Ltd UOI (Supra) and Gujarat High court order in the case if Vimal Enterprise vs UOI (Supra) That other cases relied upon by the Revenue are also not applicable as they were o .....

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monthly statutory returns verified in time and returns filed have also been duly assessed by the Jurisdictional Range authorities. Further it was argued that there were judgments on this issue giving conflicting views. That as per the following case laws extended period can not be invoked as there can not be any intention to evade duty in the light of conflicting views:- (a) Jaiprakash Industries Ltd vs CCE [2002(146)ELT 481(SC)] (b) UOI vs Bharat Aluminum Co. Ltd. [2002(146)ELT 481] That no pen .....

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llant BPCL were filing regular RT-12 returns and furnishing copies of RG-23A Part-1 account, alongwith copies of invoices & bills of enter on the strength of which credit was taken. That all the impugned 46 bills of entry were defaced by the field formations. He brought to the notice of the bench CBEC Circulars issued on the subject from time to time. That SCN was issued on 28/07/1999 is predominantly time barred. On merits be relied upon the following case laws to argue that endorsed bill o .....

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that with effect from 01/9/96 CBEC had no power to specify any other document to take cenvat credit under Rule - 57 G of the Central Excise Rules 1944 as per substitution made under Notf No. 14/96-CE (NT) dt 23/07/1996. He made the bench go through Paras 3.7 to 3.11 of the OIO dt 30/11/09. It was also his case that CBEC Circulars No. 441/7/99-CX & 179/13/96-cx dt 29/02/1996 also prescribed endorsement attestation of bills of entry by proper officer of Customs. That in the absence of such end .....

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by Supreme court, is not applicable to the facts of the present case as it pertained to the period prior to 1/9/96. It was also argued by the Learned AR that the Claim of the appellants that entire consignments were received & utilized by the appellants in the manufacture of dutiable finished goods, was not raised before the Adjudicating authorities. 6. Heard both sides and perused the case records. The issue involved in these proceedings is whether credit is admissible to the appellants aft .....

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om Para-3.7 of the OIO dt 31/11/2009 that endorsed bill of entry was a prescribed document up to 11/9/96. However as a result of Notf No. 14/96-CE(N.T) dt. 23/07/2006 & Notf No. 6/97-CE (N.T) dt 1/3/1997 only triplicate bill of entry was kept in the list of prescribed documents. Under the cenvat credit Rules any copy of bill of entry is a valid document. CBEC vide Circular No. 179/13/96- cx dt 29/2/96 has issued following clarification on the issue of endorsement & taking of credit under .....

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. (ii) Imported goods lying in customs dock area/ bonded warehouse are diverted to manufacturing units in whose name Bill of Entry has not been filed. (iii) Domestic duties paid goods consigned to a manufacturing unit are diverted in whole or part from a duty paid godown of the manufacturer or such diversion is affected in transit. 2. The issue has been examined by the Board 3. It has been decided that credit should not be denied where the Bill Of Entry is in the name of the registered office/he .....

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decides to divert/transfer the goods. A declaration by the manufacture/importer can be made on the reverse of triplicate copy of bill of Entry duplicate copy of the bill of Entry generated on EDI system by the manufacturer/importer that consignments are being delivered to the unit (name of the unit) for availing credit and endorsed by the proper Officer of Customs for enabling the manufacturing unit to avail credit. 5. In cases where the imported goods are lying in the bonded warehouse from whe .....

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t has been availed in aforesaid cases, should be submitted to the Range superintendent for the necessary verification and defacing/endorsement. 7. In case of split consignments and other type of cases not covered by the preceding paragraphs the inputs can be cleared on the payment of duty as envisaged under rule 57F/57S and on the basis of such duty paying documents credit can be availed." 6.1 Arguments were also made by the appellants that in view of CBEC No. 441/07/99- cx dt 23/2/1999 cre .....

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he credit of duty can be taken on inputs received by establishing that the duty has been paid on the said inputs on the basis of documents such as invoice, AR-1, Bill of Entry, etc. In the present case, it is not in dispute that the appellant had received 3314.159 M.T. of imported shredded steel scrap from M/s. Essar Gujarat Ltd. on which countervailing duty has been paid by M/s. Essar Gujarat Ltd. It is also not in dispute that M/s. Essar Gujarat Ltd. has not taken credit of the duty paid on 33 .....

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y the Superintendent, Central Excise, Panaji, Goa to the effect that the quantity of 3314.159 M.T. shredded steel scrap received by the appellant from M/s. Essar Gujarat Ltd. has been used as inputs in the factory of the appellant is also not doubted by the Excise authorities. In these circumstances, we are of the opinion, that in the facts of the present case, the appellant has established that the credit of duty on receipt of 3314.159 M.T. of imported shredded steel scrap from M/s. Essar Gujar .....

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is not in dispute that the goods imported and cleared on payment of duty by one person can be used as inputs and credit of duty can be claimed by another person by establishing that the imported duty paid goods have been received as inputs and that the importer has not taken credit of that duty. In the present case, it is established that the duty paid goods are received as inputs, however, the credit is denied on the ground that the Bill of entry is not endorsed in the name of the appellant. Ru .....

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hed for taking credit of duty is that the goods used as inputs are duty paid and that the credit of duty paid on the said goods has not been taken. In the facts of the present case, the evidence on record i.e. the bills of entry together with the certificates issued by excise authorities at Surat and Goa, clearly show that the goods imported and cleared under the bills of entry on payment of duty were received and utilised by the appellant as inputs in its factory and that the importer has not u .....

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inguishable on facts. Similarly, the decision of the Tribunal in the case of Tata Iron & Steel Co. Ltd. (supra) is also distinguishable on facts as the said decision is based on erroneous concession made by the Counsel for the appellant therein, that in the case of Balmer Lawrie & Co. it is held that the Modvat credit is not available on the basis of endorsed copies of bills of entry." 6.2 Relying upon the above case law CESTAT Delhi in the case of Bando India (P) Ltd Vs CCE Delhi-I .....

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ant, apart from the fact that the goods accompanying the Bill of entry were subjected to the payment of duty, and on clearance, were directly transported to the appellant's factory premises and were utilized by the appellants for installation of their factory, and no credit in respect of duty paid on those goods was taken by the contractor. Secondly, the effect of endorsement is only to amend the name of consignee and nothing more. Black's Law dictionary depicts the term "endorsemen .....

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481 (Tri-Del)]. In view of the above case law there is no difference in the bill of entry & endorsed bill of entry. The only effect of endorsement is to amend the name of the consignee, when the entire consignment is sold / sent to the consignee. As per the settled proposition of law prescribed under Bombay High Court's order in the case of Maramgoa Steel Ltd Vs UOI (Supra) more important is duty paid nature of inputs, their receipt in the appellant's unit and utilisation of the some .....

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appellants. So for as the applicability of extended period is concerned it is observed that appellants were taking credit on the basis of documents which were submitted to the department for defacement. In the light of existing factual matrix it can not be said that there was any intention on the part of the appellants to evade payment of duty. Further conflicting judgments were being given on this issue by various courts. Accordingly we are of the opinion that extended period can not be invoked .....

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