2005 (12) TMI 148 - AT - Central Excise

Summary

Issues:
1. Validity of Modvat credit taken after the expiry period of six months from the date of Bill of Entry.
2. Determination of the relevant date for computing the six-month period for taking Modvat credit.

Analysis:

Issue 1:
The appeal was filed by the Revenue challenging the Modvat credit taken by the respondent for imported metal scrap through Kandla port. The Department alleged that since the credit was taken after the expiry of six months from the date of Bill of Entry, it was not legal as per Rule 57G(5) of Central Excise Rules, 1994. The Dy. Commissioner disallowed the credit, but the Commissioner (Appeals) reversed the decision, allowing the credit based on the argument that the goods were cleared in piece-meals as per Customs procedures at Kandla port. The Commissioner relied on a previous case law stating that credit should be taken when goods are received in the factory after release from the custodian. However, the Tribunal found that the goods were not detained by Customs, and the delay in taking credit was unjustified, leading to the appeal being allowed in favor of the Revenue.

Issue 2:
Regarding the determination of the relevant date for computing the six-month period for taking Modvat credit, the Revenue contended that the date of clearance of goods should be considered, not the date of gate passes issued by a clearing agent. The Tribunal noted that the gate passes were not issued by Customs authorities and the goods were not cleared under those passes from Customs charge. The respondent argued that the exact date of clearance was not provided by the original authority, relying on a Tribunal decision stating that credit can only be taken when goods are received in the factory. However, the Tribunal found that the goods were not detained by Customs, and the delay in taking credit was not justified, leading to the appeal being allowed in favor of the Revenue.

In conclusion, the Tribunal set aside the decision of the Commissioner (Appeals) and allowed the appeal of the Revenue, emphasizing that the delay in taking credit was not justified, as the goods were not detained by Customs, and the gate passes used for claiming credit were unauthorized. The judgment was delivered on 15-12-2005.