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TMI Blog1985 (6) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... g that Paints Ltd. were invariably receiving the raw materials viz. V.N.E. Oils not directly from the manufacturers namely, M/s. Allana Oils Mills, but through their distributors, M/s. Allana Sons Pvt. Ltd., issued a notice to Paints Ltd. requiring them to show cause as to why the credit of duty amounting to Rs. 48,876.52 for the period from 13-11-1979 to 8-4-1981 should not be recovered from them under sub-rule (3)(v) of. Rule 56A of the Central Excise Rules, 1944 (for short 'Rules'). Paints Ltd. who are the respondent in this appeal sent a reply contending inter alia that they had not contravened the provisions of Rule 56A(3)(v) in as much as they had duly accounted for the goods and disposed of the goods in the manner prescribed in the rules. They further contended that they had produced gate passes along with D-3 intimation. It was also contended by them that gate passes need not be in their name and that the Central Excise department cannot impose conditions which were not contemplated by the Rules. It was also contended by them that the claim for refund of credit beyond 25-10-1980 was barred by time. The Assistant Collector of Customs who had held the enquiry rejected the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d documents, namely, gate passes. (ii) The appellants had filed D-3 intimation and along with D-3 intimation they had enclosed the certificate issued by M/s. Allana Sons Pvt. ltd. which was to the effect that 'that they had sold the entire quantity received from M/s. Allana Oil Mills mentioned in the gate pass, No. and date, to Paints Ltd. and that they had no objection for a manufacturer to take the proforma credit of the excise duty paid thereon'. There had been a proper verification of D-3 intimation by the proper officer. They had complied wit the conditions laid down in Rule 56A. In the said circumstances the demand made by the Superintendent and confirmed by the Assistant Collector had been rightly rejected by the Collector (Appeals). (iii) The allegations In the show cause notice were (1) that Paints Ltd. had brought 465490 kgs. of V.N.E. Oil and .taken the proforma credit without producing the documents, namely the gate passes. (2) that they had contravened the provisions of Rule 5A(3)(v). Both these allegations are baseless. Paints Ltd. had duly accounted for the raw materials received. Thus, there has been no violation of Rule 56A(3)(v). They had also produced gate pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be hereinafter referred to as 'inputs') used in the manufacture of the finished excisable products if the gate passes are not in the manufacturer's name or not duly endorsed in their name?' 11. It is not in dispute that Paints Ltd. were allowed the facility of proforma credit. It is further not in dispute that in the gate passes G.P. 1 the consignees are shown as M/s. Allana Sons Pvt. Ltd. It is also not in dispute that M/s. Allana Sons Pvt. Ltd. are the sole distributors of V.N.E. Oils manufactured by M/s. Allana Oil Mills. It is again not disputed that in the gate passes issued by M/s. Allana Oil Mills in the name of M/s. Allana Sons Pvt. Ltd., the manner of transport of goods are indicated as under: 'Manner of transport : delivery to M/s. Goodlass Nerolac Paints Ltd. It is further not in dispute that the inputs were received in Paints Ltd., premises in original packing and the original gate passes issued in favour of M/s. Allana Sons Pvt. Ltd., were handed over to Paints Ltd. along with the certificate from M/s. Allana Sons Pvt. Ltd. and' the specimen of the certificate reads: TO WHOMSOEVER IT MAY CONCER 'This is to certify that we have sold entire quantity of Soyabe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s but it is subject to the strict observance of the conditions laid down therein. In the instant case, I find that the assessees invariably received the consignments in the name of M/s. Allana Sons Pvt. Ltd., the distributors of M/s. Allana Oil Mills, Thane. In other words they failed to obtain their requirements of duty paid materials direct from the manufacturer of such goods in their own name under separate pass in form G.P. 1 or on account of their name through the distributors. Therefore, 'the assessees were not entitled for the proforma credit unless and until the consignments were received in their name or subsidiary gate pass was produced in their name as per the instructions contained in Trade Notice No. 77/81 dated 5-6-1981'. 14. Now according to the order of the Assistant Collector the appellants cannot avail the facility of proforma credit if they did not directly receive the inputs from the manufacturers or at least subsidiary gate pass from the distributors. The Assistant Collector's order does not indicate that the above requirements were laid down in Rule 56A. On the other hand according to the order of the Assistant Collector, the above requirements were prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore to remove those difficulties and to reduce the work especially when the entire consignment was meant exclusively for the particular manufacturer working under Rule 56A, a Trade Notice dated 9-11-1971 came to be issued by the Bombay Central Excise Collectorate. This Trade Notice dispensed with the obtaining of the certificate from the jurisdictional Superintendent. It however, required that the gate pass issued by the original manufacturer should show that the goods are ultimately meant for a particular manufacturer working under Rule 56A and the entire consignment should move without being opened at any intermediate station and the goods should remain in the original packing when they arrive at the factory of the manufacturer working under Rule 56A. 16. From the facts narrated above it could be said that there has been substantial compliance of the conditions laid down in the Trade Notice dated 9-11-1971 by the Paints Ltd. in this case. Though there is no endorsement on the gate pass by the manufacturer of inputs that the goods are ultimately meant for Paints Ltd. working under Rule 56A, there is sufficient indication in the gate pass that the goods are intended fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is highly technical. No loss of revenue to the Government is either alleged or established. 19. As has been observed earlier Rule 56A nowhere lays down that the consignee mentioned in G.P. 1 alone could avail of the proforma credit There is no prohibition in that rule for availing of proforma credit by a manufacturer who is, not mentioned in the G.P. 1 as the consignee. This Rule does not speak of endorsement on the reverse of G.P. 1 or issue of subsidiary G.P. 1. These prescriptions are under Trade Notices which have no statutory force. Violation of the condition of a Trade Notice cannot by itself be sufficient to disallow proforma credit. 20. The elaborate procedure and the production of duty paid documents provided under Rule 56A(3) are intended to satisfy the Central Excise officers that the inputs received in the factory are duty paid inputs and that no other manufacturer had availed credit in respect of the said inputs. Once the Central Excise officer is satisfied as to the duty paid nature of the inputs received in the factory and further satisfied that no other manufacturer could have availed of credit in respect of the aid inputs he should desist from raising h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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