2006 (6) TMI 355 - AT - Central Excise

Summary

Issues:
Whether Modvat credit availed on Bills of Entry after six months is disallowed under Rule 57G(5) of Central Excise Rules.

Analysis:
The appeal was filed against the Order-in-Original disallowing Modvat credit on Bills of Entry amounting to Rs. 2,11,41,077/- due to availing the credit after six months. The appellant contended that Rule 57G(5) does not apply to Bills of Entry as they are not documents "issued." They relied on Tribunal decisions like M/s. Bullows Paint Equipment Pvt. Ltd. case, stating that uncertainty in receiving goods under Bills of Entry exempts them from the time limit under Rule 57G(5). Similar views were expressed in cases of M/s. Texmaco Ltd. and M/s. Atul Ltd.

The appellant also argued against decisions like M/s. Duracell (India) Pvt Ltd. and M/s. Ashok Leyland Ltd., where Rule 57G(5) was held applicable to Bills of Entry. They highlighted that the Supreme Court in Osram Surya (P) Ltd. case addressed procedural restrictions but not the applicability of the time limit to Bills of Entry. The conflict in views led to the request for reference to a Larger Bench to determine whether Bills of Entry fall under Rule 57G(5).

Upon careful consideration, the Tribunal noted conflicting decisions on whether Bills of Entry are covered by Rule 57G(5). While some cases supported Bills of Entry being excluded, others disagreed. The Tribunal favored the view that Bills of Entry are not "issued" documents under Rule 57G(5) based on cases like M/s. Bullows Paint Equipment Pvt Ltd. However, due to the conflicting opinions and reliance on decisions not addressing the specific issue, the matter was referred to the Hon'ble President for constituting a Larger Bench to decide the question of whether Bills of Entry are covered by Rule 57G(5).

Therefore, the appeal was disposed of by referring the matter to the Larger Bench for a conclusive decision on whether Bills of Entry qualify as documents "issued" under Rule 57G(5) of the Central Excise Rules. The registry was directed to send the file to the HQrs CESTAT, New Delhi for further action.