2002 (5) TMI 613 - AT - Central Excise

Summary

Issues Involved:
- Validity of Modvat credit based on reconstructed triplicate copy of Bill of Entry for imported inputs
- Interpretation of Rule 57G regarding Modvat credit eligibility
- Retrospective effect of sub-rule (6) of Rule 57G

Analysis:
1. Validity of Modvat credit based on reconstructed triplicate copy of Bill of Entry for imported inputs:
The case involved manufacturers of bulk drugs who took Modvat credit based on a reconstructed triplicate copy of the Bill of Entry for imported inputs. The department objected to the use of a photocopy of the Bill of Entry for credit, insisting on the original triplicate copy. The appellants applied for and received a certified reconstructed triplicate copy but faced rejection of the credit by lower authorities. The central issue was whether the reconstructed copy could validate the Modvat credit.

2. Interpretation of Rule 57G regarding Modvat credit eligibility:
The appellant's counsel argued that an amendment in June 1998 (sub-rule 6 of Rule 57G) allowed for Modvat credit based on a certificate from the customs officer if the original triplicate copy was lost. The counsel contended that this amendment should be applied retrospectively to cover credits taken before June 1998. The authorities, however, maintained that during the relevant period, only the original triplicate copy was acceptable for Modvat credit, and the amendment did not have retrospective effect.

3. Retrospective effect of sub-rule (6) of Rule 57G:
The debate centered on whether the amendment to Rule 57G, allowing for credit based on a certificate in case of lost triplicate copies, could be applied retrospectively. The Revenue argued that the amendment introduced in June 1998 did not have retrospective effect and, therefore, the Modvat credit taken in June 1997 based on a reconstructed copy was not permissible. However, the appellant relied on precedents and the applicability of the amended sub-rule to support their claim for credit based on the reconstructed copy.

In the final judgment, the Tribunal considered the legal position during the relevant period and the circumstances of the case. Referring to past decisions, including Klockner Supreme Pentaplast, Hemant Plastic & Chemicals, and Poddar Pigment, the Tribunal found that the reconstructed triplicate copy of the Bill of Entry was valid for Modvat credit, given the duty-paid nature of the goods and their utilization in manufacturing. Relying on the binding Division Bench decision in Klockner Supreme Pentaplast, the Tribunal allowed the appeal, setting aside the impugned order and affirming the admissibility of the Modvat credit based on the reconstructed copy.