JUDGMENT
M.S. Shah, J.
1. All these applications are filed by the concerned Commissioner of Central Excise under Section 35H of the Central Excise Act, 1944. The question sought to be raised in these applications is –
“whether the gate passes issued prior to 1.4.1994 but endorsed during the period between 1.4.1984 and 30.6.1994 would fall under the coverage of entry Nos. 10 and 12 in the table to the Notification No. 15/94-CE(NT), dated 30.3.1994 and would consequently become eligible documents for taking credit under the Modvat scheme.”
2. We have heard Ms. P. J. Davawala, learned Additional Standing Counsel for the department and Mr. P. M. Dave for the respondent in CECGA No. 16 of 2000. We have also heard Mr. B. I. Mehta, learned Additional Standing Counsel for the department in the other two applications.
3. The notification which is required to be interpreted reads as under :-
“Modvat – Procedures to be observed by the manufacturer”
(Add on page 6.108 of Central Excise Manual 1994-95)
4. In exercise of the powers conferred by rule 57G of the Central Excise Rules, 1944, the Central Government hereby prescribes the documents specified in column (3) of the Table here to annexed and issued under the authority of the Central Board of Excise and Customs or the Central Excise Rules, 1994 specified in the corresponding entry in column (2) of the said Table for the purpose of the said rule :
5. Provided that the documents have been issued before the 1st April, 1994 and the credit under the said rule has been taken on or before the 30th June, 1994.
------------------------------------------------------------------------ S. No. Authority of the Documents CBEC or the Central Excise Rules, 1944 ------------------------------------------------------------------------ (1) (2) (3) ------------------------------------------------------------------------ xxx xxx xxx
10. (i) F. No. 263/26/88/CX-8 Endorsed gate passes/ dated January, 1989 subsidiary gate-passes/ Certificates.
(ii) F. No. 263/19/89/CX-8, dated 17th April, 1989
(iii) F. No. 8-22/88/86-TRU, dated 10th April, 1986
12. Rule 52-A (as it Gate-pass issued under stood before 1st April, rule 52-A, as it stood 1994) before 1st April, 1994. ------------------------------------------------------------------------
6. The controversy is whether if the gate passes were issued before 1.4.1994 but subsequently endorsed during the period between 1.4.1994 and 30.6.1994, the assessee can be given the benefit of the Modvat scheme.
7. Prior to 31.3.1994, the manufacturer was clearing the goods on the basis of the gate passes issued by the manufacturer. Under the Modvat scheme, the excise duty paid on an input is to be given credit against the excise duty payable by the manufacturer of the end-product made with that input. As per the position prevailing prior to 31.3.1994, when the purchaser of the input item resold it to a third party, he would wake an endorsement on the gate pass issued by the manufacturer of the input. The department did not have any objection to this benefit being granted when the gate pass was issued and endorsed upto two times as per the Circulars dated 17.4.1989 and 9.4.1990. However, by notification dated 30.3.1994 the system of gate pass has been done away with and invoices issued by the manufacturer of the input are considered to be valid documents for getting the benefit of the modvat credit. The notification dated 30.3.1994 provides for a transition period upto 30.6.1994 permitting Modvat credit being granted on the basis of gate passes issued prior to 30.3.1994. The notification specifically provides that the documents specified in column (3) i.e. “endorsed gate passes”/subsidiary gate passes/certificates were prescribed for the purpose of availing the benefit of the Modvat scheme provided that the gate passes were issued before 1.4.1994 and the credit under the said rule was taken on or before 30.6.1994.
8. The contention of the assessee was that since the proviso to the rule itself provided that the credit shall be taken on or before 30.6.1994, it necessarily implied that the it was open to the concerned purchaser-dealer buying the goods on a gate pass issued prior to 31.3.1994 by re-endorsing such gate pass between 1.4.1994 and 30.6.1994 and avail of the benefit of the Modvat scheme upto 30.6.1994. The department negatived the contention. The Tribunal accepted the contention of the assessee. Hence, these applications.
9. The submission made on behalf of the department is that the gate passes were required to be issued before 1.4.1994 and also required to endorsed before 1.4.1994. We do not find from the language of the Rules anything to substantiate that the gate pass as were also required to be endorsed before 1.4.1994. The proviso clearly used the words “the documents have been issued before the 1st April, 1994 and the credit under the said rule has been taken on or before the 30th June, 1994”. The rule making authority was conscious of the practice of endorsing gate passes and, therefore, in column (3) it has clearly provided that “endorsed gate passes” were also to be construed as the documents prescribed for the purpose of availing of the benefit under the Modvat scheme. The fact that the rule making authority also permitted the concerned parties to take benefit of the scheme on or before 30.6.1994, in our view, substantiates the case of the respondent assessees that it was open to the assessees to get the benefit of the gate pass which was endorsed after 1.4.1994 but before 30.6.1994.
10. The learned counsel for the department, however, urge that this very question has been referred by the Delhi Bench and Bombay Bench of the CEGAT to the jurisdictional High Courts.
11. The orders relied upon are only orders of the Tribunal. There is no decision of any other High Court taking a contrary view. Otherwise also, considering the fact that there is no dispute about the facts that the excise duty was paid on the inputs in question and the gate passes were not endorsed more than twice, and also considering smallness of the amounts involved in these applications (Rs. 32,753, Rs. 13,000 and Rs. 14,400 respectively), we do not think that it is necessary to issue any direction to the Tribunal to refer the question proposed for our decision.
12. The applications are accordingly dismissed with no order as to costs.