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TMI Blog2010 (4) TMI 778X X X X Extracts X X X X X X X X Extracts X X X X ..... e), if the conditions are not fulfilled, can the benefit of credit be granted terming it as technical ground, as held by the Hon'ble Tribunal? [iii] Whether, in the facts and circumstances of the case, the Hon'ble CESTAT is correct in coming to the conclusion that even though the goods were cleared before filing of bills of entry and obtaining out of charge, would not attract the provisions of Rule 7 of CENVAT Credit Rules, 2002 and Rule 57AE(3) of the Central Excise Rules, 1944?" 2. The respondent in Tax Appeal No. 1608 of 2009 is a company which is inter alia engaged in the manufacture of excisable goods, whereas the respondent in Tax Appeal No. 609 of 2008 is Manager (Excise) of the said Company. The respondent company imported 1,76,505 MTs of Iron Ore Pellets from Brazil at its captive jetty at Hazira between 17-5-2001 and 19-6-2001. The respondent filed fifteen bills of entry (each seeking clearance of 10 MTs of Iron Ore Pellets) and was in the process of filing another three bills of entry for the balance quantity, when the customs authorities discovered that the entire consignment had been lifted from the jetty and consumed by the respondent company in its factor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds as required under Rule 57AE(3) of the erstwhile Central Excise Rules, 1944, Rule 7 of Cenvat Credit Rules, 2001 and Rule 7 of the Cenvat Credit Rules, 2002, showing the actual date of receipt, disposal, consumption and inventory in respect of the said imported iron ore pellets during the relevant period; that the respondent was not entitled to avail of CENVAT credit of Rs. 5,79,12,820/- in relation to 1,66,505 MT of DR Grade Imported Iron Ore Pellets as the said duty became recoverable from the assessee by reason of fraud, collusion, wilful mis-statement, suppression of facts with intent to evade payment of duty; that Cenvat credit was availed in March 2004 whereas the inputs were received in the factory prior to 1-3-2003; and that the respondents had availed credit without prior approval of the Commissioner. 6. The aforesaid show cause notice came to be adjudicated vide Order in Original dated 30th August, 2006 made by the Commissioner, Central Excise and Customs, Surat-1, whereby CENVAT credit of Rs. 5,79,12,820/- came to be disallowed and the assessee was ordered to pay the said CENVAT credit under Rule 12 of the CENVAT Credit Rules, 2002 read with Section 11A of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learance of goods without payment of duty and without obtaining out of charge was settled by the respondents before the Settlement Commission vide order dated 16-10-2003. The Tribunal has observed that the Commissioner had agreed that bills of entry cannot be considered to be supplementary invoices as there was no sale of goods involved. That the respondents were importers of the goods and had used the same in the manufacture of their final product. The Commissioner had also agreed with the respondents that the entire disputed amount paid by them had to be treated as payment made against bills of entry; and that three bills of entry covering the balance of the goods were not allowed to be filed by the department. He however, denied credit on the ground of fraud, collusion, suppression etc. In the background of the aforesaid factual matrix the Tribunal was of the view that mere filing of a petition before the Settlement Commission cannot be considered as the respondent's tacit admission of guilt. The Tribunal found that there was no finding of the Settlement Commission or any competent authority of the respondent's guilty mind; that though goods were cleared from the respondent's je ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is of TR-6 challans, which in any case is also a prescribed document in terms of Rule 57AE(3) of the erstwhile Central Excise Rules, 1944 and Rule 7(1)(b) of the Cenvat Credit Rules, 2001. 12. The Tribunal was of the view that the three bills of entry could not be filed by the respondents on account of resistance by the Revenue and as such it was not permissible for the Revenue to now contend that the credit had been availed against TR-6 challans or that credit had been availed late. That the amended provision of Modvat Rules with effect from 4-2000 or the subsequent CENVAT Credit Rules, 2001 do not prescribe any maximum time limit for allowing credit. Reliance was placed upon CBEC's Supplementary Instructions Manual and Boards Circular dated 29-8-2000 wherein it has been clarified thus : "Cenvat credit may be taken immediately on receipt of inputs in the factory. This however does not mean, nor is it even intended that if the manufacturer does not take credit as soon as inputs are received in the factory he would be denied the benefit thereof." "Under the Cenvat Credit Rules, a manufacturer can take credit the minute the inputs are received in the factory. This however, do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent Commission in its true spirit. That despite the Settlement Commission having directed that the Jurisdictional Commissioner shall have to take a view on the admissibility of the CENVAT credit, yet the respondents assessees had on their own availed the credit. However, it is an undisputed position that the respondents have paid the entire duty on the inputs received by them and have used the same in the manufacture of final product cleared on payment of duty. There was no evidence that the clearance of goods was with the intention to evade payment of duty. The Tribunal upon appreciation of the evidence on record has come to the conclusion that it is not as if the bills of entry were not filed on account of fraud, collusion, wilful mis-statement etc., but due to non-acceptance by the Department. Under the statutory provisions there was no bar against the respondents from availing the benefit of CENVAT duty in March 2004 despite the goods having arrived in 2001. In the circumstances the Tribunal has rightly held that objection raised by the Revenue regarding non-obtaining of the approval of the Commissioner prior to availment of CENVAT credit is merely a technical objection inasmuc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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