9911796707
TMI Blog1999 (12) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... cancelled and the appellants are not liable for penalty. 2. The facts of the case in brief are that the appellants manufactured Auto Parts falling under Chapter Heading 87.50 of the Schedule of the Central Excise Tariff Act, 1985 and they availed Modvat credit on the Aluminium Sheets falling under Chapter Heading 7606.10 as per declaration filed under Rule 57G, during the period from January, 1989 to January, 1991. Under Chapter AA of Chapter V of the Central Excise Act. Based on the intelligence from Delhi Central Economic Intelligence Bureau that the availment of Modvat credit by the appellant is based on subsidiary gate pass issued by the dealers/stockists/agents of the manufacturers, but the inputs are received by the traders/sub-dealers of the said main dealers with different thickness, the investigations were conducted and delivery challans subsidiary gate passes and invoices were scrutinized which revealed that in the receipt of Aluminium Sheets by the appellant, there was a difference in thickness, quantities, of the goods received than those in subsidiary gate passes, and the subsidiary gate passes are not relevant/not issued for the goods actually received by the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for the appellant has argued that the subsidiary gate pass and goods were received by them even though from different parties under Rule 57G(2) which need not be same parties and the identity of the goods must be there. Para-2 of the Trade Notice, dated 1-3-1989 is pointed out, and 1998 (104) E.L.T. 549 (Tribunal), 1994 (74) E.L.T. 319 are relied upon. Invoices and certificate and gate passes are produced which show that the goods are same. Description of the thickness in gauges and millimeter do not show the difference in nature of the goods by conversion they tally. The dealers in the letters have identical say regarding the goods but co-relation is not possible, supply is not denied. It shows that the same goods accompanied the duty paying documents subsidiary gate pass with the same description. The appellant has produced statement under the Exhibit E-2 showing that the goods tally. He has also furnished the conversion table at pages 96-97 and 97A. There is no dispute about the other items in the Annexure A except Sr. Nos. 14 and 15 in the show cause notice and also about the receipt of the goods. The show cause notice is issued on 3-1-1994 for the period Jan., 1989 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eply, dated 14-3-1994 and the written submission of the appellant, and also subsidiary gate passes and the correspondence with the department, and statements, the contents in the suppliers documents and the Clarification from RAC meeting for Organised Sector held on 26-9-1991 and the Trade Notice, and the impugned order. Also perused case laws relied upon. (i) 1998 (104) E.L.T. 549 in the case of Hybrid Electronic Systems Pvt. Ltd. v. Commissioner of Central Excise, Mumbai, according to which under Rule 57G of the Central Excise Rules, the purchase of the goods from one party and subsidiary gate pass issued by another party for the same goods, which were duty paid and used as inputs. The documents is one of the prescribed document acceptable for taking Modvat credit and it is admissible. (ii) 1994 (74) E.L.T. 319 (Tribunal) - Prakash Fabricators Galvanizers P. Ltd. v. CCE, Aurangabad deal with the permissibility of the deemed credit on purchase of goods as well as stock transfer. Under Rule 57G(2) job worker is eligible to deemed Modvat credit on the goods purchased by his Customer, and transferred to job worker on delivery challan (para 3) this ruling does not help ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs. The customers availing Modvat facility demand the gate passes, subsidiary gate passes. They do not keep consignment-wise details of the same against each invoices/gate pass. They hand over the gate passes to their Customers who insist upon getting the subsidiary gate passes, and copies of such gate passes are not kept on their records. It is impossible to furnish the information by time the quantity and product sold under a particular sale invoice to the details shown in a particular gate pass or purchase invoice. The Paras 6 and 7 of the show cause notice discloses that the above said facts as discussed have been deliberately suppressed by the assessee so as to fraudulently avail the benefit of Modvat credit under Rule 57A, by not intimating the department and so extended period of 5 years is made applicable to present case in terms of proviso to Rule 57-I(1)(i) of Central Excise Rules, 1944, read with proviso (1) to Section 11A of Central Excise Act, 1944. 7. In response to that the appellant has replied that as per Rule 57A credit of duty paid on inputs is allowed which are used in the manufacture of final excisable products and to utilise the same credit for payment of du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoice, is purely a trade document, covers the consignment purely as a corroborative evidence, when examined by the departmental officers. They would have limited themselves to the examination of subsidiary gate passes which would have prima facie given impression that the goods actually received were inconfirmity with the description in subsidiary gate passes. When on the basis of Intelligence different documents viz. subsidiary gate passes, invoices, were critically examined these facts came to the knowledge of the department. During all these period, appellant was actually aware that the documents which actually covered the consignment was the invoices, and not the subsidiary gate passes, still the appellants persisted in claiming on the later documents which amounts to suppression of facts and misrepresentation with intent to derive the benefit of Modvat. Regarding the adjudication by Assistant Collector in page 7 of the order it is held that the benefit of doubt was given to the party, since physical verification of the facts was not possible. Even though, it is observed that as long as the goods received by the assessee are the same as covered by duty paying documents the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt to terms used in proviso to clause (1) of Section 11A of the Central Excise Act. As contended by the appellant the Commission to claim the benefit on the basis of the invoice to take credit does not amount to with intent to evade payment of duty. The appellant has disclosed all the documents on which he was getting the inputs and the taking of the credit that was accepted by the Assistant Collector in the adjudication order and the demand was discharged. Under these circumstances the contention of the appellant that the extended period of limitation cannot be made applicable to this case on the above two grounds hold good. No reason is assigned as to why show cause notice was issued after 3 years from the end of the period of the dispute. The appellant having responded to the summons and submitted his documents clearly shows his bona fides. So under these circumstances the contention of the appellant that the notice is time barred gains weight, and it is upheld. Ruling in 1990 (100) E.L.T. 8 (SC) in the Collector of Central Excise v. Malleable Iron Steel Castings Co. (P) Ltd. clearly applies to the case on hand. So also the ruling in 1996 (88) E.L.T. 726 (Tribunal) in the cas ..... 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