TMI Blog2017 (11) TMI 831X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner of Customs And Central Excise Versus M/s. Matsushita Television And Audio India Ltd. [2015 (8) TMI 1057 - ALLAHABAD HIGH COURT] would be squarely applicable to the present case, where it was held that it is undisputed that the inputs were received in the factory under the cover of a triplicate copy of the bill of entry which was subsequently misplaced, and the credit was allowed. Even after the amendment made to Rule 57G by insertion of Rule 11 by N/N. 7/99 dated 09.2.1999, the filing of documents is only procedure for availing MODVAT credit and therefore, the substantive right of the assessee would in no way get affected - The aspects mentioned in Rule 57G, especially in the context of filing documents to claim MODVAT credit is procedural and if at all there is any lacuna on the part of the assessee in complying with these procedural requirements of filing documents that would not affect the substantive right of the assessee to claim MODVAT credit. The impugned order of the first respondent / Tribunal is set aside and the questions of law framed in this appeal are answered in favour of the assessee and against the Revenue. - C.M.A. No. 2545 of 2011 - - - Dated:- 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner's factory located at Cuddalore, they have taken credit of the said amount of the additional duty i.e., 1,75,928.17 in the MODVAT register, namely, RG23A Part I and Part II. (v) Like that, the other two raw materials, Cysteamine and Isoprophyl Alcohol were also imported and appropriate customs duty including additional duty were paid under cover of Bill of Entry No. 41752 dated 11.11.1993 and 41662 dated 17.11.1993 respectively. The quantity of Cysteamine imported was 6000 Kgs for which the additional duty paid was ₹ 1,78,526.57. The quantity of Isoprophyl Alcohol imported was 25,600 Kgs and the additional duty paid for this material was ₹ 1,27,096.94. In respect of these consignments also, after the goods were cleared from the customs and reached the factory located at Cuddalore, the assessee company availed the MODVAT credit and entered the details in the MODVAT register, namely, RG23, Part I and Part II. (vi) It is one of the condition that, inorder to avail the credit facility under MODVAT scheme, the duty paid on the materials received at the factory should be accompanied by documents specified in Rule 57 G(4) of the Rules. For the impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause notice to the assesse. However, the third respondent by letter dated 23.9.1994, after having rejected the plea of the assessee on the strength of production of certified photocopy of the original Bill of Entry, had confirmed the demand of ₹ 3,05,623.41 being the wrongly availed MODVAT credit, under 57A of the Rules, raised in the show cause notice, and also imposed a penalty of ₹ 200/-. (xi) Subsequently, the Revenue had also issued further show cause notice dated 14.7.1994 almost on similar line of earlier show cause notice in respect of the other two items, namely, Methyl Aceto Acetate and also Isoprophyl Alcohol. (xii) In response to the said show cause notice, the assessee company on 17.8.1994 had given a reply by annexing the photostat copies of Bill of Entry in question duly certified by Customs Department. (xiii) However, the Revenue without accepting the said request made by the assessee company to accept the photostat copies duly certified by the Customs Department, confirmed the demand of ₹ 1,75,928.17 as a wrongly availed MODVAT credit under Rule 57A of the Central Excise Rules, 1944 as raised in the show cause notice and also impos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , learned counsel appearing for the assessee / appellant and also Mr.A.P.Srinivas, learned standing counsel appearing for the Revenue / respondents. 4. The learned counsel appearing for the assessee would submit that, the issue as to whether MODVAT credit can be allowed for an imported raw material without submitting the documents enumerated under Section 57 G (3) of the Rule, has already been decided in a number of cases, in favour of the assessee, especially, in the context, where, if the importer / manufacturer actually brought the inputs to the factory and having utilized the same for manufacturing of finished goods and also had availed the MODVAT credit, based on anyone of the documents mentioned under 57 G (3) of the Rules. In support of her contention, the learned counsel for the assessee would rely upon the Judgment of the Division Bench of the Allahabad High Court reported in 2015 324 ELT 264 (All). COMMR. OF CUS. C.EX. VS. MATSUSHITA TELEVISION AUDIO INDIA LTD. 5. The learned counsel for the assessee would also state that, the assessee had imported the raw materials as inputs and had paid duty by production of original documents, based on which, those materials a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivas, learned standing counsel would argue that, in view of the consistent decisions taken by the Courts of law, the assessee is not entitled to take MODVAT credit without the availability or production of original triplicate copy of the Bill of Entry. The learned standing counsel would also submit that, even though certified photostat copy of the Bill of Entry had been sent or produced, pursuant to the show cause notice issued by the Revenue, that would not cure the defect of producing the original Bill of Entry as the relevant rule, namely, 57 G(3) of the Rules, specifically contemplate that any one of the documents enumerated under sub clause (iii) of the said Rule, should have been produced before the Revenue for availing the MODVAT credit and therefore, without any one of such document as contemplated under the Rule, it cannot be claimed by the assessee that, they would be entitled to claim the MODVAT credit, by merely filing photostat or attested / certified copy of the documents. 10. The learned standing counsel in this regard would heavily rely upon the aforesaid three Judgments, including the Division Bench Judgment of this Court, which is a jurisdictional High Court an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing transit as the assessee company is having its factory at Cuddalore and head office at Chennai. In this regard, the further case of the assesse is that, it is not in dispute that the raw materials were imported and against the Bill of Entry, duty had been paid and only thereafter, the inputs reached the factory. And it is also not in dispute that those inputs alone were utilized for manufacturing the finished products, which were subjected to payment of excise duty, as against which only, as per the MODVAT rule, the assessee claimed MODVAT credit on the basis of the entry registered in the MODVAT register. 16. Therefore, the only issue to be decided, according to the assessee, in this case is that, whether the production of attested / certified photocopy of the triplicate Bill of Entry can be treated as a valid document for the purpose of allowing the MODVAT credit to the assessee and whether that question can be decided, according to the assessee's counsel, on the basis of the Judgment of a Division Bench of Allahabad High Court reported in 2015 (324) E.L.T 264 (All.) cited supra. 17. Before we dwell into the case laws, the relevant rule may be looked into and therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturer or from any other premises from where the goods are sold by or on behalf of the said manufacturer, under cover of an invoice issued under Rule 57G; or (b) an importer or from the depot of an importer or from the premises of the consignment agent of the importer, under cover of an invoice issued under Rule 57G. (ii) second stage dealer means a dealer who purchases the goods from a first stage dealer. 18. Among various documents as enumerated above, under Rule 57G(3), the triplicate copy of Bill of Entry is one of the documents in clause (c) of Rule 57G(3). 19. In the case in hand, it is the claim of the assessee that, the said triplicate copy of the Bill of Entry was produced, and only based on which duty was paid for clearing the goods from customs, and those goods imported are nothing but three named items of raw materials which are necessary inputs for manufacturing the final product at the factory. 20. In this regard, the claim of the assessee is that, those imported items, since have been subjected to duty, had been cleared by the customs only on the basis of Bill of Entry, and those items had reached the factory, whereupon the assessee had c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods in question were not received under the cover of the relevant documents and that the goods were duty paid. The Assistant Commissioner Central Excise Division-III, NOIDA has also not disputed the duty paid character of the goods and the fact that these were received in the factory for intended purpose under the cover of relevant documents. The case of the department is that the triplicate copy of bill of entry as required under Clause (c) of sub-rule(3) of Rule 57G could not be subsequently produced by the assessee for defacement. The stand taken by the assessee that the triplicate copy of the relevant bill of entry was misplaced, was also not disbelieved either by the Assistant Commissioner or by the first appellate authority. Since the triplicate copy of the bill of entry was misplaced and, as such, the assessee obtained from the bank the exchange control copy of the relevant bill of entry and filed the same along with various other documents. He also executed an indemnity in favour of the Central Excise department to the extent of Modvat credit availed. The said authenticated exchange control copy of the bill of entry obtained by the assessee from the bank could have been eas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d copy of the invoice, issued by the jurisdictional superintendent, to fulfill the requirement of Rule 57G of the Central Excise Rules, 1944 claimed MODVAT credit. However, it was rejected on the ground that the production of certified copy of the invoice cannot be treated as fulfillment of requirement of Rule 57G of the Rules. 32. As against the said order of the Assessing Authority the matter was appealed and the Commissioner (Appeals) while setting aside the order of the Assessing Authority held that, the assessee was eligible for MODVAT credit on the invoice certified by the jurisdictional Superintendent of Central Excise. Aggrieved by the same, the Revenue prepared the appeal before the CESTAT, where also the view of the Commissioner (Appeals) was confirmed, against such decision, the matter was carried by the Revenue before Madhya Pradesh High Court. 33. In that case, the High Court of Madhya Pradesh has held as follows: 4. We have perused the impugned order, heard the learned counsel and carefully considered the requirement of Rule 57G of the Rules. Though Rule 52A in Sub.R.3 lays down requirement of production of original and in the absence thereof, a duplicate, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the credit, more so, when certified copies of triplicate copy of the Bill of Entry evidencing payment of duty have been submitted. In this view of the matter, the impugned orders cannot be sustained and are therefore, set aside. 37. However, the CEGAT (Tribunal) in its impugned order, having not accepted the findings given by the Commissioner (Appeals) observed that, the facts which were not in dispute are that, at the time of submission of RT 12 returns, the respondents did not submit the original of the triplicate copy of Bill of Entry. 38. The Tribunal, further observed that, the learned counsel for the respondents have been emphatic that there was no allegation by the department that the original triplicate copy of the Bill of Entry was not received along with the goods. It has further held that, they did not find any substance in the argument of the assessee's counsel. The reason for such finding, according to the Tribunal, was that, the department came to know about the documents for the first time these are submitted along with RT 12 returns. 39. Only based on these findings, the Tribunal ultimately, came to the conclusion that, the assessee is not eligibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e view taken by the Punjab Haryana High Court as also Madhya Pradesh High Court and Chhattisgarh High Court as also the Circular issued by the Central Board of Excise and Customs dated 23rd February, 1999. 39. From the conjoint reading of the Rules 52A, 57G and the amendment made by Notification No.7/99, dated 9th February, 1999 by which sub-rule(11) was inserted in Rule 57G, we are of the considered opinion that filing of the documents for availing Modvat credit is only a procedural matter and the amendment made vide Notification No.7/99, dated 9th February, 1999 which inserted sub-rule (11) in Rule 57G the position was made clear that Modvat credit should not be denied only on the ground that the documents referred to in sub-rule (2) does not strictly comply with the said Rule but contains the details of payment dues, description of goods, assessable value, name and address of the factory or warehouse etc. This position has also been clarified by the Central Board of Excise and Customs by issuing a Circular in exercise of its power under Section 37B of the Act and made it applicable to all pending cases. 45. Thus the view of the Allahabad High Court in the aforesaid J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roper enquiries. Wherever the Assistant Commissioner, after making due enquiry, is satisfied that the Modvat credit taken by the assessee is incorrect, adjudication proceedings in the normal course should be initiated. Efforts, however, should be directed toward reduction of litigation. 4. All pending cases may be disposed of accordingly. 5. Trade and field formations may be suitably informed. 48. The second Judgment cited by the Revenue is 2014 (310) E.L.T. 859 (Mad.)(cited supra). In that case, the fact remains that, when the importer sent the goods removed from Visakhapatnam Steel Plant, had produced only one invoice for the entire consignment, whereas the said consignment had been split into several smaller consignments. Only in that context, inview of Rule 52A(4) of the Rules, the Division Bench has held that, when a consignment is split up into two or more lots and, each of which is dispatched separately either on the same day or on different days, separate invoice shall be made in respect of each lot. Only in that context, single invoice produced by the assessee was not accepted by the Revenue and therefore, that stand was accepted by the Division Bench of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licate invoices and the Department is bound to follow the circular instructions in view of the judgment reported in Union of India v. Arviva Indusries (I) Ltd.- 2007(209) E.L.T.5(S.C.) = 2008(10) S.T.R. 534 (S.C)., wherein it was held thus ( para 6): 6. In this particular case, the Board's Circular No.39/99-Cus., dated 25th June, 1999 extends the benefit of Brand Rate of Drawback to compensate exporters for the re-rolled steel products and processed fabrics. The High Court has rightly come to the conclusion that the circulars issued by the Board are binding on the department. An effort was made by the learned Solicitor General to get this case referred to a Larger Bench. We do not accept this contention in view of number of decisions and especially the Constitution Bench decision in Dhiren Chemical Industries (I) (supra). From the above circular instructions, it is clear that the circular instructions are binding on the department and in pursuance of circular instructions only, the order impugned before appellate authority was passed and that order needs no interference by this Court. 6. Accordingly, the Central Excise Appeal is dismissed. There shall be no orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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