ORDER
V.P. Gulati, Member (T)
1. The issue involved in the instant appeal relates to Modvat Credit in respect of goods that were lying in stock and were received for the job work, under Rule 57H of the Central Excises and Salt Act, 1944.
2. The Ld. Consultant for the Respondents has pleaded that there were other inputs lying in stock at the relevant time and Modvat Credit in respect of the same has been allowed. So far as this quantum of goods which were received on job work basis the Modvat Credit has been denied as there was no gate pass in existence evidencing payment of duty and endorsement thereon carried no name at the relevant time. Since they opted for Modvat credit subsequently he has pleaded the goods were shown as having been received as part consignment under an endorsed gate pass.
3. Ld. D.R. has pleaded inasmuch as though there was no valid document evidencing payment of duty in terms of Rule 57G of the Central Excises and Salt Act, 1944 the ld. lower authority has rightly denied the benefit of the Modvat Credit.
4. I have considered the pleas made by both sides. Goods at the time they were received were not covered by requisite gate passes evidencing payment of duty. Goods have been received by the appellants under a document which showed the removal for self by the supplier of the goods. He has also pleaded the appellants opted for Modvat credit and the endorsement on the gate pass was changed and the gate pass was endorsed in the name of the appellants. It is observed that the Modvat credit facility under Rule 57H has been permitted in respect of the inputs which were lying in stock immediately before the filing of the declaration. The goods have to be such as had suffered duty and the Assistant Collector has to be satisfied in regard to this. The plea of the Appellants is that the goods had suffered necessary duty and there was evidence in existence in regard to payment of duty and therefore notwithstanding that subsequent endorsement was made in the gate passes to show that the duty paid goods had been sent to the appellants and since facility granting Modvat credit on endorsed gate pass was allowed at the relevant time the benefit of Modvat credit should have been allowed. I observe that an assessee who claims Modvat credit at a point of time might have received goods before opting for Modvat credit and since at that time of receipt of goods the assessee may not have contemplated the availment of Modvat Credit the document in the hands of the assessee under which goods were received might not therefore meet of the requirements for Modvat purpose under Rule 57G. Notwithstanding the provisions of Rule 57G the statute has provided for the facility of Modvat in respect of the goods which might be lying in stock before the filing of the declaration by the assessee under Rule 57G for availing of the Modvat credit. Discretion in this regard has been vested with the Assistant Collector. This discretion has to be exercised in a manner so as to advance the purpose of the Modvat scheme and with that end in view what has to be seen is whether there is evidence of payment of duty in respect of the goods lying in stock. If this is satisfied the benefit of Modvat credit normally ought not to be denied. In the present case it has been urged that there is a gate pass in existence which had been endorsed for the ‘self by the supplier of the goods and which endorsement subsequently was changed to indicate that the goods had been sent to the appellants. In that view of the matter, Ld. Lower authority should not have denied the Modvat credit merely because the appellants did not satisfy the requirements of the documents as laid down under Rule 57H. I, therefore, hold that the lower authority’s order is not proper and the same is therefore set aside. The lower authority should examine the issue de novo in the light of the above after affording an opportunity of being heard to the appellants. The appeal is thus allowed by way of remand.