1990 (9) TMI 197 - Commissioner - Central Excise

Summary

Issues:
1. Denial of credit for duty paid on inputs due to non-endorsement of gate pass.
2. Interpretation of Rule 57A of Central Excise Rules, 1944.
3. Validity of obtaining a letter from consignor to establish diversion of consignment.

Analysis:
The appeal involved a dispute regarding the denial of credit for duty paid on inputs by M/s. Keonics Video Colour Division due to the non-endorsement of the gate pass in their favor. The Assistant Collector disallowed the credit of Rs. 11,925.00 (BED) and Rs. 596.25 (SED) in respect of inputs received from M/s. M.R. Electronic Components Limited, Madras, consigned to M/s. Electronics Trade and Technology Development Corporation Limited, Bombay. The appellants argued that the consignment was diverted to them as per instructions from the consignor and produced a letter to support their claim.

The Collector (Appeals) considered the submissions and highlighted the necessity of proper duty paying documents accompanying goods. Although the gate pass was not endorsed in favor of the appellants, it was consigned to another entity, which then sent the goods to the appellants for further manufacture. The Superintendent had advised the appellants to obtain a letter from the consignor confirming the diversion of the consignment. The key point of contention was whether the non-endorsement of the gate pass in favor of the appellants justified the denial of credit. The Collector emphasized that as long as the goods were charged the appropriate duty rate, credit should be permissible, irrespective of the endorsement on the documents.

The crucial factor in favor of the appellants was the letter obtained from the consignor, M/s. M.R. Electronic Components Limited, confirming the diversion of the consignment as per instructions. This letter played a significant role in establishing the legitimacy of the diversion and supported the appellants' claim for credit. Consequently, the Collector (Appeals) set aside the order of the Assistant Collector and allowed the appeal, ruling in favor of M/s. Keonics Video Colour Division.