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2016 (5) TMI 10 - GUJARAT HIGH COURT

2016 (5) TMI 10 - GUJARAT HIGH COURT - 2016 (337) E.L.T. 515 (Guj.) - Cenvat credit on the inputs on the basis of documents endorsed by the consignee - Duty paying document - Availing modvat credit on duty paid inputs under Rule 57A of the Central Excise Rules, 1944 - Held that:- in exercise of powers under Rule 57G of the Central Excise Rules, 1944, the Central Government under notification dated 30.3.1994 prescribed invoices issued by a manufacturer from his factory or depot or wholesale distr .....

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his godown or dealer of an imported goods registered with the Central Excise Officer containing the details, as are prescribed under Rule 57GG as the documents for the purpose of Rule 57G. In other words, subject to fulfilling the conditions provided in the said notifications, the invoices issued by the said category of persons would qualify a manufacturer to avail cenvat credit on the inputs used. This decision was completely lost sight of by the Tribunal. We find that major changes were made i .....

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PONENT : MR SHRIDEV J VYAS, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. This tax appeal was admitted for consideration of the following substantial question of law : Whether the Tribunal has erred in taking into account, the endorsed invoices for allowing Modvat credit, contrary to the provisions of Rule 57G of the Central Excise Rules, 1944? 2. The question arises in the following background. The respondent assessee was engaged in the manufacture of NES powder and liqui .....

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rent endorsed invoices. In all invoices, consignee was M/s. PyreneRai Metal Treatments Ltd. who had endorsed the invoices in favour of the assessee on the basis of which assessee had taken modvat credit. According to the department, these endorsed invoices could not be used for claiming modvat credit as per Rule 57G( 2) of the Rules as amended. The department therefore, issued a show cause notice to the assessee calling upon it to show cause why the modvat credit taken to the tune of ₹ 7,0 .....

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e disposed of by common order dated 3.12.1996 by which the adjudicating authority disallowed the modvat credit totalling to ₹ 23,06,261/and imposed penalty of ₹ 1,25,000/under Rule 173Q of the Central Excise Rules. The order passed by the adjudicating authority was challenged by the assessee before the Commissioner (Appeals) who by his order dated 23.6.99 confirmed the order passed by the authorities below and rejected the appeal making the following observations : To avoid the duty .....

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. It is further observed from the record that 217 impugned invoices issued during the period 22.05.95 to 28.09.95 (May'95 to Sept.'95) were endorsed by M/s. Pyrene Rai Metal Treatment Pvt. Ltd in favour of the appellants. The appellant also admitted in their appeal memorandum as well as at the time of personal hearing that they had taken modvat credit on the endorsed invoices. Therefore, the arguments of the appellants that modvat credit was available on endorsed invoices is not acceptab .....

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n further appeal before the Tribunal. The Tribunal by the impugned judgement allowed the appeal and reversed the decisions of the revenue authority making the following observations : 6. In the case of M/s. Crop Health Products Ltd, vs. CCI, Meerut reported in 1998 (102) ELT 376 (Tribunal),it is held that the appellants are entitled to Modvat credit although invoices were issued in the name of the other company, the goods were manufactured by the appellants on behalf of another company, the appe .....

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8) RLT 110(CegatMum), which distinguished the case in M/s. Balmer Laqwrie & Co. ltd vs. CCE. Kanpur2000( 116) ELT 364(Tribunal), it was held the same principle as in the case of M/s. Guric Chem Pvt. Ltd. 9. In the case of CCE, Mumbai vs. M/s. Goodlass Nerolac Paints ltd.1986( 26) ELT 57(Tribunal), it was observed that in order to claim proforma credit, it is not essential that the manufacturer, who availed proforma credit, should be shown as the consignee in GPI or there should be a subsidia .....

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ignoring the amended requirement of section 57G under which only upon production of certain documents, the assessee would be eligible for taking cenvat credit. The Tribunal ignored the decision of larger Bench in case of Balmer Lawrie & Co. Ltd v. Commissioner of C. Ex., Kanpur reported in 2000 (116) ELT 364 (Tribunal). No one appeared for the respondent. 6. From the above discussion, it can be seen that the short controversy that arises in this appeal is whether respondent assessee was ent .....

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his godown subject to certain conditions, as document for the purpose of said Rules. Likewise, under notification dated 4.7.1994, the Central Government had prescribed invoices issued by a manufacturer from the factory or his depot or dealer of an excisable goods registered with the Central Excise Officer or an importer from his godown or dealer of an imported goods registered with the Central Excise Officer containing the details, as are prescribed under Rule 57GG as the documents for the purpo .....

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