9911796707
TMI Blog2007 (11) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of Rule 26 of the Central Excise Rules, 2002. 2. As per the facts on record, the appellants imported a consignment 1,76,505 MTs. of Iron Ore Pallets from Brazil The said consignment of iron ore pallets was brought at captive jetty at Hazira between 17-5-2001 and 19-6-2001. Appellant filed 15 BOE (each seeking clearance of 10,000 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 almost the entire consignment of iron ore pellets had been cleared from the jetty and consumed in the appellant's factory without waiting for assessment (in two cases) and without waiting for an out of charge order to he passed in 14 out of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent and against TR-6 challans payment of CVD, for which bills or entry was accepted by the Revenue after the Settlement Commission's order and assessed thereafter, The notice raised under of grounds for denying the credit, inter alia that they had not maintained proper records as required under Rule 57A of the erstwhile Central Excise Rules, 1944/Rule 7 of Cenvat Credit Rules, 2001/2002; that there was a specific bar of such credit for availment in terms of Rule 57AE(1)(i) and Rule 7(1)(b) of Cenvat Credit Rules inasmuch as the case booked by the Customs authorities were one relating to non-levy by reason of fraud, collusion, wilful misstatement, suppression of facts with intent to evade payment of duty; that Cenvat credit stands availed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Accordingly, he dropped the above objection. He also agreed with the appellants that the entire disputed amount paid by them has to be treated as payment made against the bills of entry. He also agreed that the three bills of entry covering the balance of the goods were not allowed by the Department to be filed, which fact stands admitted by the Hon'ble Settlement Commission. However, he denied credit on the ground that the duty was paid as a result of fraud, collusion, suppression etc. and the very fact that the dispute was settled before the Settlement Commission is indicative of the appellant's mala fides. 9. We agree with the appellant that mere filing a petition before the Settlement Commission cannot be considered the appellant's ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and used by them in the manufacture final product cleared on payment duty, the denial of the substantive right of the appellant on hyper technical grounds cannot be upheld. No doubt, the appellants cleared the goods from their captive jetty without completing customs formalities For which purpose they may be penalized but the Modvat credit duty paid by them (may be subsequently in terms of the order of the Settlement Commission) cannot be disallowed. It also seen that no penalty for the alleged offence of clearance of goods without filing bills of entry stand imposed upon them by the Settlement Commissioner. Bill of entry are the prescribed documents for the purpose of availment of credit in terms of Modvat rules and when the same stand ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it intended that if manufacturer does not take credit as soon inputs are received in the would be denied the benefit of Cenvat credit. Such an interpretation is not tenable". 11. Even otherwise appellant's right to avail Cenvat credit was protected by virtue of Section 38A of the Central Excise Act, 1944, which specifically provides that even if a rule is superseded as in the instants case, (Central Excise Rules, 1944 being superseded by Cenvat Credit Rules, 2001 which were superseded by Cenvat Credit Rules, 2002), the rights which had accrued under the erstwhile rules protected/saved. 12. Rule 9 of the Cenvat Credit Rules, 2002, also lays down a transitional provisions in terms of which Cenvat credit which had been earned under the erstw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e receipt, consumption and closing stock including CVRD pellets and product despatch and closing stock of finished goods. PIC log books showing receipt and issue of various raw materials prepared on a daily basis, HBI ship report and jetty ship report, etc. that Essar Steel Ltd. had cleared separated CVRD pellets since 26-5-2001………" As such, the denial of credit on the above finding, which does not seem to be substantiated by any evidence and is against the facts recorded in another SCN, as reproduced cannot be made basis for denial of credit. 15. In view of the foregoing, we find no justifiable reason to uphold the impugned order. Accordingly, the same is set aside and both the appeals are al lowed with consequential relief to the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X
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