1992 (7) TMI 179 - AT - Central Excise

Summary

Issues:
- Validity of denial of Modvat credit due to absence of proper Gate Passes
- Consideration of alternative plea of limitation
- Admissibility of plea of limitation at the appeal stage
- Verification of endorsement in Gate Pass No. 142
- Time-bar issue in issuing show cause notice

Analysis:
1. Validity of denial of Modvat credit: The appellants argued that the denial of Modvat credit was based on the Collector (Appeals) finding that goods were not accompanied by duty paying documents due to discrepancies in the Gate Passes. The appellants contended that the goods were directly consigned to them from the manufacturers, and their name and address were shown in the Gate Passes. They explained that even when ordered through authorized agents, their names were mentioned in the Gate Passes. The Tribunal held that as long as the appellants' names appeared in the Gate Passes, the denial of Modvat credit was incorrect. The Tribunal found that the goods were properly accounted for and directly received by the appellants, allowing the appeal except for one Gate Pass where verification was required.

2. Consideration of alternative plea of limitation: The appellants raised an alternative plea of limitation, arguing that it could be raised at the appeal stage as it was a question of law. The Collector (Appeals) had not considered this plea, stating it was a new point. The Tribunal disagreed, stating that a plea of limitation could be raised at the appeal stage without the need for fresh facts. The Tribunal allowed the appeal on the grounds of limitation, emphasizing that the Collector (Appeals) should have considered this aspect.

3. Verification of endorsement in Gate Pass No. 142: The Tribunal noted discrepancies in Gate Pass No. 142, where the consignee's name did not match the appellants' name. The appellants claimed that the consignees had endorsed the Gate Pass in their favor, but this endorsement was not visible in the copy presented. The Tribunal remanded the matter to the Assistant Collector for verification of the endorsement. The Tribunal emphasized that if the endorsement was not present, the matter should be dealt with on its merits within the rules.

4. Time-bar issue in issuing show cause notice: The Tribunal addressed the time-bar issue in the show cause notice, noting that it was issued beyond the permissible period as per the rules. The Tribunal found that the notice was time-barred as it was issued more than six months after the alleged irregular credit availed by the appellants. The Tribunal highlighted that no suppression or misstatement was alleged, and the appeal was allowed on merits, with the time-bar issue considered secondary.

In conclusion, the Tribunal allowed the appeal concerning all Gate Passes except No. 142, where verification of endorsement was required. The appellants were entitled to consequential reliefs, and the matter related to Gate Pass No. 142 was remanded for further examination by the Assistant Collector. The Tribunal emphasized the importance of considering pleas of limitation at the appeal stage and ensuring compliance with the rules regarding show cause notices.