2009 (6) TMI 106 - HC - Central Excise

Whether gate passes issued prior to 1-4-94 but endorsed after that date would fall under the coverage of entry no. 10 in the Table to the Notification No. 16/94-C.E. (N.T.), dated 30-3-94 and would consequently become eligible documents for taking credit under the Modvat Scheme ? Held that - Taking into consideration the language of the Notification, interpretation of the same by different High Courts as well as the above referred circular, we answer the reference in affirmative.

Summary

Issues:
Interpretation of Notification No. 16/94-C.E. (N.T.) dated 30-3-94 regarding eligibility of gate passes for Modvat credit.

Analysis:

1. The central issue in this judgment revolves around the interpretation of Notification No. 16/1994-C.E. (N.T.) dated 30th March, 1994, specifically concerning the eligibility of gate passes for Modvat credit under Entry No. 10 of the notification. The question referred to the High Court was whether gate passes issued before 1-4-94 but endorsed after that date would qualify under the said entry and become eligible documents for claiming credit under the Modvat Scheme. The notification required documents to be issued before 1st April 1994, and credit to be taken on or before 30th June 1994. The Tribunal rejected the Revenue's argument that endorsements on gate passes should also be made before 1st April 1994, emphasizing that the language of the notification only required the issuance of gate passes before the specified date, not the endorsement.

2. Reference was made to a similar case before the Gujarat High Court, where it was held that gate passes issued prior to 1-4-1994 but endorsed after that date but before 30-6-1994 could be considered valid documents for claiming credit. This decision was followed by the Punjab & Haryana High Court and the Himachal Pradesh High Court in subsequent cases. Additionally, the Central Board of Excise & Customs issued Circular No. 600/37/2001-CX, accepting the Gujarat High Court's judgment and instructing that pending cases be decided accordingly. Considering the consistent interpretation by various High Courts and the circular, the High Court answered the reference in the affirmative, affirming the validity of gate passes endorsed after 1-4-1994 for availing credit under the Modvat Scheme.

3. The High Court's decision was based on a comprehensive analysis of the language of the notification, the interpretations by different High Courts, and the circular issued by the Central Board of Excise & Customs. By aligning with the previous judgments and the circular's directives, the High Court concluded that gate passes endorsed after 1-4-1994 but before 30-6-1994 could indeed be considered valid documents for claiming Modvat credit, in accordance with Entry No. 10 of Notification No. 16/94-C.E. (N.T.) dated 30-3-94.