2004 (2) TMI 579 - AT - Central Excise

Summary

Issues:
Denial of Modvat credit on a bill of entry for availing it after the prescribed period of six months under Rule 57G(5) of the Rules.

Analysis:
The appeal before the Appellate Tribunal CESTAT, New Delhi involved the denial of Modvat credit on a bill of entry by the Revenue against the impugned order-in-appeal passed by the Commissioner (Appeals). The issue revolved around the disputed amount claimed by the respondents after the expiry of the prescribed period of six months under Rule 57G(5) of the Rules.

The learned Commissioner (Appeals) allowed the Modvat credit by relying on the precedent set in the case of Bullows Paint Equipment (P) Ltd. v. CCE, Mumbai. It was argued that the provisions of Rule 57G(5) did not apply to the bill of entry as it was considered a valid document for claiming the Modvat credit under Rule 57G(3). On the contrary, the Respondent's Counsel contended that the absence of the word 'issued' in relation to the bill of entry meant that the six-month period prescribed under Rule 57G(5) did not apply to it. Reference was made to the Tribunal's judgment in the case of CCE, Meerut v. Ownes Brockway (I) Ltd.

After hearing both sides and examining the provisions of Rule 57G, the Tribunal concluded that the bill of entry was indeed a modvatable document, and the six-month period for claiming Modvat credit applied to all documents detailed in Clause (3), including invoices and bill of entry. The Tribunal rejected the arguments that tried to exclude the bill of entry from the purview of Clause (5) of Rule 57G. The Tribunal also distinguished previous judgments cited by the parties, emphasizing that the specific issue regarding the application of Clause (5) to bill of entry was not considered in those cases.

Furthermore, the Tribunal referred to the Apex Court's decision in Osram Surya (P) Ltd. v. CCE, Indore, which upheld the constitutional validity of the amendment of Rule 57G, noting that the Modvat credit could not be claimed on any duty paying document after six months. Consequently, the Tribunal set aside the impugned order-in-appeal, ruling that the respondents were not entitled to claim the Modvat credit on a bill of entry after the expiry of six months. The appeal of the Revenue was allowed, and the penalty imposed on the respondents was upheld, as it was filed by the Revenue and not the respondents.