1996 (8) TMI 245 - AT - Central Excise

Summary

Issues:
1. Admissibility of Modvat credit on gate pass endorsed after 31-3-1994.
2. Validity of duty-paying documents for Modvat credit under Rule 57G.

Analysis:
1. The appeal challenged the Collector (Appeals) decision on Modvat credit from gate passes endorsed after 31-3-1994. The dispute involved items at serial Nos. 1, 5, and 7 of the show cause notice. The appellant, engaged in resin poly buttons blanks manufacturing, faced allegations of taking Modvat credit on gate passes endorsed post 1-4-1994 and purchasing inputs from unauthorized dealers. The department demanded Rs. 83,900 under Rule 57-I and Section 11A of the Central Excises & Salt Act, 1944. Lower authorities upheld the demand.

2. The appellant's counsel argued two categories of dispute. Firstly, regarding two GP 1s issued before 30-3-1994, with Modvat credit taken on 2-4-1994 and 15-4-1994. Citing Notification No. 16/94, the counsel contended that endorsed gate passes before 1-4-1994, with credit taken before 30-6-1994, were valid. Referring to the Moosa Haji Patrawala case, the counsel asserted the validity of the gate passes for Modvat credit. Secondly, on the issue of invoices from authorized dealers, counsel relied on Notification No. 15/94, arguing that M/s. M.G. Associates' invoice was valid under substantial quantity purchase criteria. The counsel's arguments were supported by legal precedents.

3. The JDR supported the lower authorities' findings, emphasizing their lucid analysis. The Tribunal, after hearing both sides, found that gate passes issued pre-1-4-1994, with credit taken before 30-6-1994, were valid under Notification No. 16/94. Citing the Moosa Haji Patrawala case, the Tribunal confirmed the validity of endorsed gate passes for Modvat credit under Rule 57G. Regarding the second issue, the Tribunal deemed M/s. M.G. Associates as a dealer under Notification No. 15/94 due to substantial quantity purchases, validating their invoice for Modvat credit. Consequently, the appeal was allowed, granting any consequential relief to the appellants as per the law.