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TMI Blog2005 (7) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... kan waives service of Rule on behalf of the respondents. By consent of the learned Counsel appearing for respective parties the matter is taken up for hearing and final disposal today. 4. The petitioner, a partnership firm, engaged in business of manufacture of texturised synthetic filament yarn at its factory purchased certain inputs for the manufacturing process and availed credit of duties paid on such inputs. As per duty paid documents of inputs for the period from July l994 to August 1994 the petitioner had taken total Modvat credit amounting to Rs. 4,22,230/-. It appears that on scrutiny and verification of duty paying documents as the Adjudicating Authority was of the opinion that the availment of such Modvat credit was not permissible a show cause notice came to be issued on 4-1-1995 upon the petitioner to show cause why the same should not be recovered and consequently penalty be not imposed. After considering the assessee's explanation the Adjudicating Authority passed an order on 27-2-1997 directing the recovery of Rs. 4,22,230/- under Rule 57-I of the Central Excise Rules, 1944 (the Rules). A personal penalty of Rs. 45,000/- also came to be imposed under Rule 173Q( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said goods were resold by the purchaser the gate passes were endorsed. However, with effect from March, 1994 the clearance of excisable goods from factory was prescribed by the Central Government to be under invoices. A buyer of such goods was allowed to issue another invoice containing details of the goods, details of the manufacturer of goods, payment of such duties etc. as per Notification No. 15/94-C.E. (N.T.), dated 30-3-1994. 7.1 Thereafter, it was submitted that, vide Notification No. 33/94-C.E. (N.T.), dated 4-7-1994 rules were amended and dealers/traders were required to be registered if they were dealing in purchase of resale of excisable goods. On 7-11-1994 another Notification was issued whereunder Rule 57H of the rules came to be amended relating to the procedure prescribed for registration of dealers so as to cover transitional period. 8. The case of the petitioner is that the revenue authorities and the Tribunal have wrongly read the circular to mean that a dealer has to be registered by 31-12-1994 or else the invoice issued by such dealer, despite denoting duty paid status would not be accepted as valid document for permitting the purchaser of such goods to avai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as the petitioner. Therefore, the view adopted by the Tribunal was correct and no interference was called for. He placed reliance on decision of Larger Bench of the Tribunal in case of Balmer Lawrie & Co. Ltd. v. Commissioner of Central Excise, 2000 (116) E.L.T. 364 (Tribunal) and adopted the reasoning of the Tribunal in its order dated 10-1-2000. 11. Having gone through the aforesaid decision in case of Chistia Texturising it is not possible to accept the contention that the facts are identical. The only grievance made before the Court in the said matter was that CESTAT had not considered binding decisions of CESTAT itself cited before it. The Court thereupon restored the appeal to the file of CESTAT. No such grievance exists in the present case, none is made at the hearing. 12. The undisputed facts are that the petitioner obtained various goods (inputs) from M/s. J.C.T. Limited in July and August, 1994. As recorded by the Commissioner (Appeals) the said invoices contain the necessary details as required under Notification No. 15/94. M/s. J.C.T. Limited had made an application before the Appropriate Authority seeking registration on 29-12-1994 and registration has been g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s valid document for the purpose of allowing Modvat credit. 5. It is clarified that such invoice should contain the details5. as referred to in Notification 15/94-C.E (N.T.), and Notification 21/94-C.E. (N.T.). The Assistant Collector shall recognize such document if issued by the categories of persons mentioned in the said notifications, who have got themselves registered under Rule 57GG of the Central Excise Rules, consequent to issued Notification No. 32/94-C.E. (N.T.), dated 4-7-1994. 6. It is further clarified that the document prescribed above by6. the Central Board of Excise and Customs could be accepted by the Assistant Collector only upto 31st December, 1994. In other words, any document issued by registered person prior to such registration would be acceptable if he is eligible to issue invoice/document under Notification No.15/94-C.E.(N.T.) and Notification No. 21/94-C.E.(N.T.). 7. In view of above the Board desires that an immediate exercise7. should be taken as per provisions of law so that the credit intended to be allowed, as above, is not denied. 8. Trade and field formations may be suitably informed." 13.1 Paragraph No. 3 of the said Circular states that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te, if one may say so, viz. 31-12-1994 is only in relation to exercise of discretionary powers by the Assistant Collector. From that it does not flow nor does the language employed by the Circular indicate that a dealer has to obtain registration by 31-12-1994. The only inference that is available is that if a document/invoice is issued by a person after 31-12-1994 the Assistant Collector has no discretion vested in him to accept such document. It could be argued that if the authority does not have a discretion then the dealer has to be registered as a natural corollary by 31-12-1994. That could be a plausible view but that by itself would not mean that the Circular prescribes that the registration has to be obtained by 31-12-1994. Otherwise the phrase "prior to such registration" becomes redundant and such an exercise cannot be ascribed to the Board. 14. Even if one proceeds on the assumption that such a view was the correct view, as laid down by the Apex Court in case of State of U.P. and Another v. Haji Ismail Noor Mohammad and Co. (supra) the efficacy of the certificate of registration becomes material and relevant at the time when the assessee concerned is required to be gran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stances, on the basis of which the registering authority, may not issue the certificate by so called due date. A simple example would be, absence of the registering authority, being on leave and charge being available with some other officer, who because of more pressing work may not attend to the work for which he holds additional charge, and in such circumstances to expect that the dealer must obtain registration by due date would be asking almost for the impossible, especially from the assessee who is merely a purchaser. Therefore, the denial of modvat benefit only on this technical plea is not justified in law, especially when all other requirements have been fulfilled by the supplying dealer. 17. In this connection, the approach laid down by the. Apex Court in the case of Assessing Authority and Others v. M/s. Patiala Biscuit Manufacturers Pvt. Ltd. (supra) requires to be adopted and applied to the facts of the case. It is stated thus : 16. Be that as it may, the words 'has been registered and"16. possesses a registration certificate' used in sub-section (1) of Section 7 have to be construed in accord with the general tenor of the section as a whole, and in a manner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further remained to be done so far as the petitioner was concerned. 19. The Larger Bench decision of the Tribunal in case of Balmer Lawrie & Co. Ltd. v. Commissioner of Central Excise (supra) on which reliance was placed by revenue merely lays down that registration has been made mandatory "only with a view to eliminate bogus, fictitious, fraudulent, benami traders/dealers from the commercial market and to bring more transparency in the trade and to avoid misuse". Even while accepting the aforestated objective, as already stated hereinbefore, if the identity of supplier and the genuineness of the transaction is established there is no reason why the assessee should be denied what is legitimately due to it. The inference drawn by the Tribunal that the invoice issued by a dealer who had failed to get himself registered upto 31-12-1994 cannot be legally treated as a valid document is not supported by a plain reading of the Circular accompanied by various Notifications. In fact the Larger Bench of the Tribunal has failed to assign any reason for drawing any such inference except for stating the object with which the amendment has been brought about. The said decision therefore cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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