9911796707
TMI Blog2010 (9) TMI 402X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, the Revenue is bound by it and cannot be allowed to plead that it is not valid nor that it is contrary to the terms of the statute. - Despite the decision of this Court, the Department cannot be permitted to take a stand contrary to the instructions issued by the Board. - A show cause notice and demand contrary to existing circulars of the Board are ab initio bad. - It is not open to the Revenue to advance an argument or file an appeal contrary to the circulars. - 3495 of 1995 - - - Dated:- 21-9-2010 - V.C. Daga and R.M. Savant, JJ. REPRESENTED BY : S/Shri Kapil Moye with Ricab Chand i/by Vigil Juris, for the Petitioner. S/Shri P.S. Jetly with J.B. Mishra, for the Respondent. [Judgment per : R.M. Savant, J.]. By the above Petition filed under Article 226 of the Constitution of India, the Petitioners take exception to the Notification dated 30-3-1994 in so far as it purports to prevent the Petitioners from taking Modvat Credit after 30-6-1994 on the basis of a gate pass issued prior to 1-4-1994. The Petitioners also challenge orders/letters dated 20-12-1994 and 6-1-1995 and the communication dated 8-7-1998. 2. facts necessary to be cited for adjudication ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said Acts and the said Rules i.e. RG-23A and RG-23-A Part II registers. This was done some time in the first week of December 1994. It is the case of the Petitioners that without giving any prior show cause notice, the 3rd Respondent directed the Petitioners to reverse Modvat Credit amounting to Rs. 23,85,653/- availed off by them in respect of the said Metal Anodes on the ground that after 30-6-1994 the gate pass issued prior to 1-4-1994 was not a valid document. The Petitioners replied to the directions issued by the 3rd Respondent and explained that credit availment is extended up to 31-12-1994 vide Notification No. 21/94 CE(NT) dated 12-5-1994 read with Notification No. 30/94-N T dated 29-6-1994 and submitted that Modvat Credit ought not to be denied on the ground that the gate pass had been issued prior to 1-4-1994. The said submission of the Petitioner was not accepted and the 3rd Respondent reiterated that the gate pass issued prior to 1-4-1994 was valid only for the purpose of availing Modvat Credit up to 30-6-1994. It appears that 3rd Respondent did not even refer to the Notification dated 29-6-1994 relied upon by the Petitioners. The 3rd Respondent directed the Petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r with full details of gate pass when the material was received in their factory as per Notification No. 21/94 (NT) as amended by Notification No. 30/94 (N.T.). In the above Petition an interim order came to be passed on 21-8-1995 granting interim relief in terms of prayer clause (d) of the Petition on condition of the Petitioners furnishing a Bank guarantee in the sum of Rs. 23,85,653/-. Against the said interim order, the matter was carried to the Apex Court by the Respondents by way of SLP No. 20142/95. In the said SLP, a counter affidavit came to be filed on behalf of the Petitioners which was dated 28-9-1995 and to the said counter affidavit was annexed a copy of the excise invoice issued by the manufacturer of the inputs, which invoice co-related the details mentioned in the gate pass issued by the manufacturer. The Apex Court vacated the said interim order, however, declined to consider whether the subsequently obtained invoice complied with the requirements of the notifications as according to the Apex Court, that was not the basis on which interim order was passed by this Court and this Court had not even considered the said subsequent invoice. The Apex Court clarified t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dvat credit as the said gate passes can also be said to be a document covered by the said circular dated 8-11-1994. 8. Per contra, it was submitted on behalf of the Respondents that the Petitioners had produced invoice for the first time whilst annexing it to their counter affidavit filed in the Supreme Court and the same was in the year 1996. Since the circular prescribes that such invoice had to be submitted prior to 31-12-1994, the Petitioners, having not complied with the said condition, were therefore not entitled to the benefit of the said Modvat credit. The learned counsel for the Respondents therefore submitted that there is no merit in the above Petition and the Petitioners are not entitled to any relief. 9. We have given our anxious consideration to the rival contentions addressed by the learned counsel for the parties. 10. The issue, as can be seen, that arises for consideration is, the Petitioners entitlement for Modvat credit. The said Excise Rules and especially Rule 57G thereof entitles an assessee to avail of Modvat credit. The assessee is required to file a declaration under Rule 57G and was entitled to avail of the credit on the basis of the gate pass issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... budgetary changes in 1994-95 in relation to the proper document for the purposes of Modvat credit and on account of the Notification No. 21/94 dated 12-5-1994 and Notification No. 15/94 dated 30-3-1994, the CBEC had issued a Circular dated 8-11-1994. By the said circular, the CBEC had forwarded a copy of Notification No. 64-CE (NT) dated 7-11-1994 amending Rule 57H. The said Rule 57H of the said Rules deals with the transitional provisions. The amendment to the said Rule, inter alia permitted acceptance of an invoice or any document as may be prescribed by the CBEC as a valid document under Rule 57G for the purposes of Modvat credit. Clauses 4 and 6 of the said Circular are relevant for the purpose of present Petition and are reproduced herein under :- Clause-4 :- Now therefore by virtue of powers conferred by rule 57H of the Central Excise Rules, 1944, the Central Board of excise and Customs hereby prescribes the invoice/document issued by - (i) manufacturer from his factory; (ii) a manufacturer from his depot; (iii) a wholesaler distributor/dealer of the manufacturer; or (iv) an importer from his godown; as valid document for the purpose of allowing Modvat credit. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioners had gate gate passes which are of the date prior to 1-4-1994 as also considering the fact that the Petitioners have all other contemporaneous material in the form of delivery challan, octroi receipt etc. and the Petitioners availing of the Modvat credit in the first week of December 1994, there can be no doubt that the Petitioners have in fact received the goods in the 1st week of December 1994 and have availed off Modvat credit immediately thereafter. It is not the case of the Respondents that the gate pass produced by the Petitioners did not comply with the requirements of Rule 57G. The Petitioners have sought to be deprived of the Modvat credit only on the ground that the Petitioners have not submitted the invoice prior to 31-12-1994. In our view, considering the material that is on record, merely because the Petitioners have not produced the invoice prior to 31-12-1994 would be taking a highly technical view of the matter and such view, would be unwarranted considering the fact that the circular dated 8-11-1994 has been issued to mitigate the difficulties arising out of budgetary changes taking place in the year 1994-95. The matter can be looked at from another ang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion issued by the Central Board of Excise and Customs (CBEC) which had specifically construed the phrase already been paid, as occurring in condition 1 against Sl. No. 3, to include cases where nil rate of duty had been prescribed. No doubt this was done on the basis of the decision of this Court in Usha Martin [1997 (7) SCC 47]. It is also true that the decision in Usha Martin was over-ruled by this Court in the decision of Dhiren Chemical Industries (supra) the Constitution Bench of this Court has made it clear that regardless of the interpretation placed on the aforesaid phrase by the Court, if there were circulars which had been issued by the CBEC which placed a different interpretation upon the pharasc, that interpretation would be binding on the Revenue. This view has been reaffirmed in Collector of Central Excise, Vadodara v. Dhiren Chemical Industries, 2002 (143) E.L.T. 19. Therefore the circulars in question issued by the Revenue as long as they were not withdrawn which they were but only in 2002. For the period in question the circulars were operative. The appeals are, accordingly, dismissed albeit for reasons which are different from those expressed by the Tribunal. W ..... X X X X Extracts X X X X X X X X Extracts X X X X
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