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TMI Blog2015 (2) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... ture of final products and return the same to the factory within 180 days for further use in the manufacture of the final product or removing after payment of duty for home consumption or for removing the same without payment of duty to a unit in a free trade zone or to a hundred per cent export oriented undertaking. They could also be removed under bond for export. By sub-rule (12), (13) and (14) there are further stipulations and upto sub-rule (21), if all these sub-rules are read together and harmoniously as has been done by the Tribunal, then, no other view of the matter is possible. It is not a mandate flowing from the Rules that if the inputs or partially processed inputs are not received within 180 days in the factory of the manufacturer, then, he be disallowed the Cenvat credit and in totality. The Rules provide for situations under which, if the goods are not received back within 180 days, the credit can be adjusted. The proportionate credit can be denied and by calling upon the manufacturer to debit the account. All this would indicate as to how the makers and framers of the Rule did not intend to deny MODVAT credit simply because the inputs were not received after pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... That is how the show cause notice dated 1st May, 2001 was issued calling upon the Respondent to show cause as to why irregular/inadmissible credit availed intentionally should not be demanded and recovered and a penalty should not be imposed for the illegality. The Respondent was called upon to pay interest as well. 4. The show cause notice was adjudicated and an order of adjudication was passed confirming the demand on 5th December, 2001 (Annexure-B). 5. Being aggrieved and dissatisfied with this order, the Respondent- Assessee preferred an Appeal before the Appellate Authority, namely, Commissioner (Appeals) who allowed it by his order dated 28th March, 2002. The Tribunal has dismissed the Revenue's Appeal by the impugned order. 6. Mr. Rao , learned counsel, appearing for the Revenue in support of this Appeal, submits that the substantial question of law needs to be answered in favour of the Revenue and against the Assessee. He relied upon the wording of the Rules to urge that the Tribunal completely misread and misinterpreted these Rules. If the Rules contemplate that the inputs or capital goods are cleared to a job worker and they must be received back within 180 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iling of the credit or inputs received on completion of job work. Only the job work input received within 180 days is eligible for the MODVAT credit. The annexures to Challans issued pertain to July 1999 to November 1999. There was no provision prior to 1st March, 2000 to allow MODVAT credit on inputs received after lapse of 180 days. Thus, there is a contravention of Rule 57F (4) read with Rule 57-A of the Central Excise Rules. Aggrieved by such an order passed on 5th December, 2001 an Appeal was preferred to the Commissioner (Appeals) by the Respondent- Assessee . He passed an order thereon dated 28th March, 2002/20th June, 2002. He held that the undisputed facts would show that the goods were cleared as per provisions of Rule 57F (4) by debiting 10% of the value inputs. The Assessee availed credit on the goods received back from the job worker after the stipulated period of 180 days. The credit had been taken only after receipt of the goods. The receipt of the goods and the credit taken have also been mentioned in the statutory record, namely, RG 23A Part-I and II. These documents have been submitted by the Assessee to the Department along with their monthly returns . Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aving jurisdiction over the factory of manufacturer of the final products who has sent the inputs or partially processed inputs outside his factory to a job-worker may, by an order in each removal of such inputs or partially processed inputs, and subject to such conditions as he may impose in the interest of revenue including the manner in which duty, if leviable , is to be paid, allow finished goods to be cleared from the premises of the jobworker .] [ 4A * * * *]. 11. A bare perusal thereof would indicate that the inputs on which credit has been taken may be used in or in relation to the manufacture of final products. The inputs may be removed for home consumption or for export under bond. By sub-Rule (3) all removals of inputs for home consumption shall be made on payment of duty equal to the amount of credit availed in respect of such inputs and under the cover of invoice prescribed under Rule 52A . 12. By Rule 57F (4) the inputs are permitted to be removed or after they have been partially processed by the manufacturer of the final products to a place outside his factory under the cover of a challan specified in this behalf by the Central Board of Excise and Cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In that event, the manufacturer shall recalculate the amount of actual credit attributable to such inputs or on inputs contained in the partially processed inputs and thereafter he shall adjust the differential amount, if any, after taking into account the amount already debited while sending the inputs or partially processed inputs from his factory. 15. By sub-rule (12), (13) and (14) there are further stipulations and upto sub-rule (21), if all these sub-rules are read together and harmoniously as has been done by the Tribunal, then, no other view of the matter is possible. It is not a mandate flowing from the Rules that if the inputs or partially processed inputs are not received within 180 days in the factory of the manufacturer, then, he be disallowed the Cenvat credit and in totality. The Rules provide for situations under which, if the goods are not received back within 180 days, the credit can be adjusted. The proportionate credit can be denied and by calling upon the manufacturer to debit the account. All this would indicate as to how the makers and framers of the Rule did not intend to deny MODVAT credit simply because the inputs were not received after processing or j ..... X X X X Extracts X X X X X X X X Extracts X X X X
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