1979 (3) TMI 65 - CGOVT - Central Excise

Summary

Issues:
1. Eligibility of the petitioners to avail proforma credit without duty paying gate passes.
2. Compliance with procedural requirements for availing proforma credit.
3. Failure of the Collector to consider documentary evidence produced by the petitioners.
4. Justification for setting aside the penalty and granting proforma credit.

Detailed Analysis:
1. The case revolves around the eligibility of the petitioners to avail proforma credit without possessing duty paying gate passes issued by the manufacturer of billets. The petitioners argued that they received goods from the stock yard of the main producers with relevant gate passes available at the respective Branch sales office, enabling them to credit duty paid on the billets based on delivery challan-cum-invoice from the stock yards.

2. The Collector of Central Excise, Calcutta found the petitioners in violation of the prescribed procedure, as per Trade Notice No. 150 of 1970, by failing to produce gate passes evidencing duty payment on the billets. The petitioners' appeal to the Board was rejected on the grounds of non-compliance with procedural requirements.

3. The petitioners presented documentary evidence, including certificates from the Superintendent of Central Excise confirming duty payment on the goods and the procedural difficulties faced in obtaining necessary certificates. However, the Collector failed to consider this evidence in the original order, leading to the petitioners' plea for a fair review of the case.

4. The Government acknowledged the challenges faced by the petitioners in following the prescribed procedure for proforma credit due to the complex supply chain. They noted the petitioners' efforts to comply with requirements and the submission of evidence post-hearing, indicating duty payment on supplies. The Government concluded that the breach was technical, with no malicious intent, and set aside the penalty while directing the Collector to re-examine the petitioners' claim based on the evidence presented.

In conclusion, the judgment focused on procedural compliance, equitable treatment, and the substantive justice of granting proforma credit to the petitioners. The decision highlighted the importance of considering all evidence and circumstances before imposing penalties or denying legitimate claims.