9911796707
TMI Blog1989 (11) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts of the case in detail. The confirmation of the demand and the rejection of the appeal are only on the ground that the Gate passes, under which the input materials viz. Naphthalic Anhydride, received by the appellants' factory, have been endorsed thrice by the recipients of the goods prior to receipt in the appellants' factory. The facts, which are not disputed by either side, are that the entire goods covered by the Gate Passes in original packed condition, have been received by the appellants' factory. But these goods have changed three hands duly endorsed by three recipients before they ultimately reached the appellants' factory. The show cause notice has been issued by the Superintendent on the ground as below: "It is observed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king. Shri Christian, contended that though in this case, endorsement is more than twice, it should not stand in the way of extension of credit, because of the fact that this is only a breach of the executive direction restricting the number of endorsements to 2. The main spirit behind the modvat scheme is to ensure that the credit of duty actually paid on the input materials is made available to the manufacturer of the finished product and this scheme is mainly intended to avoid the cascading effect of taxation of input. This has totally been missed and a narrow view is taken that input duty relief should not be given because the gate passes have been endorsed more than twice. So long as the department does not have any doubt regarding the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent upto two times on the gate pass, so that the goods can be received under these endorsed gate passes, provided they are supplied in full quantity as covered by the gate pass and received in factory packed condition. Shri Arya also contended that for administrative reasons, the Board have permitted such endorsements only limited to two in number. If the parties go on taking the credit on gate passes with more than two endorsements, it will cause a considerable burden for verification and it is also open to abuse. He, therefore, contended that in this case admittedly, credit has been taken on gate passes bearing more than two endorsements and hence should not be allowed. 4. We have carefully considered the arguments from both sides. The m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vat scheme, so long as the duty paid nature of the goods and duty paid thereon could be established. As seen from the Trade Notice cited by the learned Advocate, it is evident that the Government is keen to extend the modvat credit so long as the goods in factory packed condition as are covered by the gate passes are received by the parties intending to avail modvat credit. Going by this spirit of the relaxation, we are unable to appreciate the routine and mechanical approach of the authorities below in rejecting the claim of the modvat credit only on the ground that more than one endorsement have been made. When the Board themselves have taken a decision to relax the procedural requirement by way of administrative instruction it should be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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