TMI Blog2018 (12) TMI 771X X X X Extracts X X X X X X X X Extracts X X X X ..... e/documents based on which the credit is taken if it is proved that the inputs have suffered duty and were used in the process of manufacture. The Board further directed that all pending cases may be disposed off in accordance with the guidelines laid down in the aforesaid Circular. All the particulars in respect of the said MCI inserts and the credit taken thereon were duly entered in the RG23A Parts I & II, the extracts whereof were regularly submitted by the Respondent to the Central Excise authorities alongwith the monthly RT-12 returns. The bona fide omission to furnish the duty paying documents for defacing cannot be treated as suppression of facts by the Respondents. It is well settled that when availment of credit and utilization thereof has been reflected in RT-12 Returns, the non submission of duty-paying documents cannot be treated as suppression of facts. Appeal dismissed - decided against Revenue. - Appeal No. E/75203/2016 - FO/76507/2018 - Dated:- 19-4-2018 - Shri P.K. Choudhary, Member (Judicial) Shri D. Halder, AC(AR) for the Appellant (s) Dr. Samir Chakraborty, Sr. Advocate Shri G.K. Mundra, C.A. for the Respondent (s) ORDER Per S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Rule 571 of the 1944 Rules read with Section 11A of the 1994 Act. The main allegation of the show cause notice was that the Modvat credit has been taken by the respondent assessee on the basis of Gate Passes issued in the name of Railways, without obtaining endorsement in favour of the respondent. The Adjudicating Authority confirmed the denial and ordered for recovery of Modvat Credit and also imposed penalty of equal amount under Rule 173Q of Central Excise Rules, 1994. On appeal, the Commissioner (Appeals) set aside the adjudication order and allowed the appeal. Revenue is in appeal before the Tribunal. 2. Ld. D.R. reiterates the grounds of appeal and contends that the assessee has availed credit immediately after receiving inputs prior to endorsement of Gate Pass in question, produced as duty paying document, which is the clear violation of clarification issued by the Ministry of Finance, Department of Revenue vide F.No.B.22/8/86-TRU dated 10.04.1986. 3. Ld. Senior Advocate appearing on behalf of the respondent assessee contends that Rule 57G(2) of the Central Excise Rules, 1944 provided that no credit shall be taken unless inputs are received in the factory under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the receipt, consumption and inventory of the said MCI Inserts in the prescribed form RG23A Parts I and II, the extracts whereof were regularly submitted by the respondent to the Central Excise authorities. 6. The Commissioner (Appeals) has found as under: 6. It is seen that the lower authority accepted the facts of receipt of the inputs in appellant s factory, use of the inputs for the manufacture of their finished products, duty paid nature of the said inputs and subsequent endorsement of the Gate Passes by the railways in the name of the appellant on 06.02.1992 and 16.12.1992. However, he disallowed the credit only on the ground that such credit is not available prior to such dates of endorsement of the Gate Passes. 7. I find from the appellant s submission and case records that the said inputs were originally purchased by the Railways for free supply to the appellant and sent directly to their factory at Panagarh by cosigning the Railway PWI, Panagarh, who is stationed inside their factory for inspecting the said inputs before handing over to the appellant. The lower authority has recorded this in his order and raised no objection regarding this fact. Therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gments relied upon by the Commissioner (Appeals). The ld. Commissioner (Appeals) has held that the ratio of the judgment of Kolkata Bench of the Tribunal in the case of Arunoday Construction Co.(P) Ltd. vs. CCE reported in [2001(137) ELT 426] is squarely applicable to the facts and circumstances of the present case. In the above case, this Hon ble Tribunal held as under: 6. It is seen that the appellants have taken the credit in respect of inserts on the basis of the invoices issued directly by the manufacturer under the provisions of Rule 52A. Though the name of the inspector of Works has been shown on the said invoices, the address is that the appellants. The name of the Inspector of Works has been shown because the goods were purchased by the Railways and supplied free of cost to the appellants. There is no dispute about the fact that the appellants directly received the goods from the manufacturers under the cover of the said Rule 52A. When the value of the Inserts is being added in the value of the final product, the appellants are admittedly entitled to the benefit of the Modvat Credit of the duty paid on the Inserts. There is also no dispute about the fact that such dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order is that denial of credit, merely for the reason of the duty paying document being endorsed, would create administrative difficulties and would create problems in extending the intended Modvat Credit relief, and, therefore, denial of credit should not be on that ground alone, but only on a finding, upon verification that the consignment in question had not discharged the duty claimed as Modvat Credit. A perusal of the instructions issued by the Board from time to time shows that procedural difficulties were standing in the way of implementing the scheme. In order to obviate these, the Board itself finally issued Circular dated 23.2.99 that on procedural grounds credit should not be denied. In these facts and circumstances, we are in full agreement with the view taken by this Tribunal in SBS Organics Case. 14. I also find that the Commissioner (Appeals) has also rightly relied upon the decisions in the following cases, wherein it has been held that Modvat was allowable even if the Gate Pass is endorsed subsequently:- (i) Usha Associates vs. CCE [1995(78) ELT 281 (Tribunal)] (ii) Maniar Co. vs. CCE [1998 (102) ELT 84 (Tribunal)] 15. I find that all the particu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sub-section (3) of Section 25 clarifies and affirms that notification issued under sub-section (1) shall be subject to the condition that the duty on customs chargeable on such goods shall not exceed the statutory duties. Sub-section (3) further states that the notification under Section 25(1) can relate to rate of duty expressed in a form or method different from the form or method in which the statutory duty is leviable, but subject to the condition that the rate of duty shall not exceed the statutory duty, i.e. valuation, weight, number, length, area, volume or any other measures but explanation does not refer to the time limit and the right of the Government, by issue of a notification, to reduce the statutory time limit for claim of refund in Section 27 of the Act. 27. The word exemption as used in sub-section (1) of Section 25 can and should include extension or increase in time but cannot be stretched and expounded to include power of the Government to, by a circular, reduce the statutory time for a claim of refund stipulated under the principal enactment, i.e. the Customs Act, 1962. That would make the circular ulta vires the statute and beyond the scope of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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