1997 (9) TMI 192 - AT - Central Excise

Summary

Issues:
Department's appeal against Commissioner (Appeals) order allowing credit based on gate passes issued to Head Office at Bombay. Validity of endorsed gate pass as a document for availing credit. Consistency of Commissioner's orders. Interpretation of Notification No. 16/94 regarding eligible documents. Precedents set by Tribunal in similar cases. Multi-unit company scenario and Modvat credit.

Analysis:
The Department appealed against the Commissioner (Appeals) order, contending that the respondents wrongly availed credit based on gate passes issued to their Head Office at Bombay. The Commissioner allowed the benefit, considering an endorsed gate pass as a valid document, although not prescribed by the Board under Rule 57H and Notification No. 16/94. The gate pass, issued after 1-4-1994, was endorsed on 19-12-1994, which the Department argued was invalid. The Departmental Representative highlighted inconsistencies in the Commissioner's orders and cited Tribunal cases Siyaram Platex and Larsen & Toubro Ltd. to challenge the decision.

The Counsel for the respondents pointed out that Notification No. 16/94 included endorsed gate passes as eligible documents and referred to Rule 52A pre-amendment. They argued that gate passes issued before 1-4-1994 but endorsed later were valid for Modvat credit, citing the Tribunal's ruling in Moosa Haji Patrawala Pvt. Ltd. case. The Counsel emphasized that the Commissioner correctly relied on Siyaram Platex and Larsen & Toubro Ltd. decisions due to the multi-unit company structure and urgent transfer of goods to another unit.

The Tribunal considered the submissions and noted the validity of the Counsel's arguments. It upheld the Commissioner's decision, citing the Tribunal's previous rulings in Larsen & Toubro Ltd. case. The Tribunal clarified that the address on duty paying documents did not disallow credit for inputs received and consumed in the factory. It affirmed that in multi-unit companies, duty paying documents showing a different unit's address were valid for credit, without the need for endorsement.

Therefore, the Tribunal rejected the Department's appeal, affirming the Commissioner's application of previous judgments and the validity of endorsed gate passes for Modvat credit. The cross objection was disposed of accordingly, in line with the open court announcement.