2003 (10) TMI 582 - AT - Central Excise

Summary

Issues: Validity of Gate passes issued prior to 1-4-94 but endorsed thereafter for availing Modvat credit.

Issue 1: Validity of Gate passes for availing Modvat credit
The appeal was listed for hearing as the issue was covered by a decision of the Hon'ble Gujarat High Court and instructions from the Central Board of Excise and Customs. The Appellants availed Modvat credit based on Gate passes issued before 31-3-94 and endorsed after 1-4-94, with credit taken before 30-6-94. The adjudicating authority denied the credit, stating that endorsed Gate passes after 1-4-94 were not valid duty paying documents. However, the issue had been addressed in previous cases, such as Moosa Haji Patrawala Pvt. Ltd. v. Commissioner of Central Excise, Bombay-I, and the Hon'ble Gujarat High Court's decision in the case of M/s. Krishna Chemicals, Ahmedabad. The Circular dated 19-11-2001 from the Central Board of Excise and Customs accepted the High Court's judgment, stating that Gate passes issued prior to 1-4-94 but endorsed thereafter were valid for credit if taken before 30th June 1994.

Analysis:
The issue revolved around the interpretation of Notification No. 16/94-C.E. (N.T.), dated 30-3-94, regarding the validity of Gate passes for availing Modvat credit. The Appellants had followed the procedure of using Gate passes issued before 31-3-94 but endorsed after 1-4-94, with credit claimed before 30-6-94. The dispute arose when the adjudicating authority rejected this method, deeming endorsed Gate passes after 1-4-94 as invalid for duty credit. However, the Tribunal had previously addressed this issue in the case of Moosa Haji Patrawala Pvt. Ltd. v. Commissioner of Central Excise, Bombay-I, and the Hon'ble Gujarat High Court further clarified the matter in the case of M/s. Krishna Chemicals, Ahmedabad. The Circular issued by the Central Board of Excise and Customs on 19-11-2001 endorsed the High Court's interpretation, confirming the validity of Gate passes issued before 1-4-94 but endorsed thereafter for availing credit, provided the credit was taken before 30-6-94. This judgment provided clarity and guidance for similar cases pending decision, ensuring consistency in the application of the law regarding Modvat credit and Gate passes.