ORDER
V.K. Jain, Member (T)
1. This Appeal has been filed by Commissioner, Central Excise, Bhubaneswar-II against the Order-in-Appeal No. 53/B-II/2003 dated 26.6.2003 passed by the Commissioner’s (Appeals).
2. The brief facts of the case are as follows:
M/s. Tata Refractories Limited, Belpahar are the manufacture of Refractory Bricks falling under Chapter 68 and 69 of the Central Excise Tariff. They had taken credit on duty on capital goods to the tune of Rs. 12,67,979.87 during the months of September 1994 to November 1994 without complying the provisions of Rule 57Q and 57T of the erstwhile Central Excise Rules, 1944. Among other allegations the following allegations were made on the show-cause notice proposing to recover the above amount under Rule 57U ibid.
(i) Credit was taken after 30.6.94 on GP-Is issued before 1.4.1994 which was not permissible as per Notification No. 16/94-CE (Non-Tariff) dated 30.3.1994.
(ii) No intimation towards receipt of the capital goods in question was given as required under Rule 57T of the Central Excise Rules, 1944.
3. The Assistant Commissioner confirmed the above duty amount towards wrong availment of Modvat credit and penalty of Rs. 50,000 was also imposed by him. Being aggrieved of the order passed by the Assistant Commissioner, M/s. Tata Refractories Limited, Belpahar appealed before the Commissioner (Appeals) Bhubaneswar. The Commissioner (Appeal) vide his order referred to above while upholding the disallowance inadmissible credit of Rs. 61,686 has allowed the appeal of the Respondent on the rest of the demand. The Commissioner (Appeal) has also reduced the penalty to Rs. 500. The Revenue has filed an appeal against this order of the Commissioner (Appeals). In the ground of appeal it has been submitted by the Revenue that the assessee has availed Modvat credit after 30.6.94 amounting to Rs. 10,79,419.37 on the gate passes prior to 1.4.1994 which is not permissible as per Notification No. 16/94-CEX (NT) dated 30.3.1994 read with Rule 57G(2) of Central Excise Rules, 1944. Further, the Revenue has submitted that Rs. 1,72,202.30 were disallowed by the Lower Authority on the ground that the goods were not received in the factory by the assessee and the assessee have not intimated the date of the receipt of the said goods in their factory. The Modvat credit on these cases have been taken after 30.6.1994. The Commissioner (Appeal) in his Order-in-Appeal has observed that “I find the appellants have subsequently requested and written to Range Superintendent to verify the said goods in their factory.” The Revenue alleges that the above observation of the Commissioner (Appeal) does not appear to be correct since the Commissioner (Appeal) has not mentioned any specific letter No. and/or date of the assessee addressed to the Superintendent making such a request. Thus, the Commissioner (Appeal) has allowed the Modvat credit only on presumptions and assumptions which is not reasonable as per law. The Revenue has disputed the Commissioner (Appeal’s observation that substantial credit cannot be disallowed merely on act of procedural lapses as contravention of statutory provision made under Rules and Notifications cannot be considered as mere act of procedural lapses.
4. Heard Shri K. Sanyal, JDR for the Revenue. He reiterates the grounds of appeal given in the appeal filed by the Commissioner. He submits that the Larger Bench in case of Montari Industries Limited v. Commissioner of Central Excise, Chandigarh, 2001 (134) ELT 662 (Tribunal LB) has held that gate passes issued before 1.4.1994 credit can be availed even after this date but before 30.6.1994 and not thereafter in view of the Notification No. 16/94-CE (NT). He also contended that the requirement of the Notification is mandatory. He also relied upon this Tribunal decision in the case of SAIL v. Commissioner of Central Excise, Jamshedpur, 2003 (89) ECC 113 (T): 2003 (58) RLT 172 (CESTAT-Kolkata) wherein it has been held that “the gate passes issued prior to 1.4.1994 valid for taking credit up to 30.6.1994 as per notification-credit is not available after 30.6.1994 on such gate pass for any reason.” The Ld. JDR further submits that the credit for these gate passes have been taken after 30.6.1994. Thus, it should be disallowed. He submits that in view of above decisions of the Tribunal, the Appeal filed by the Revenue be allowed.
5. We have heard Shri S.P. Majumdar, Advocate for the Respondent. He submits that the order passed by the Commissioner (Appeal) is perfectly legal and correct. The Commissioner (Appeal) has observed that the said goods on which Modvat has been taken are used in the manufacture of final product. He submits that the Commissioner (Appeal) is rightly held that substantial Modvat benefit cannot be denied for mere procedural lapses. He submitted that the goods were received by the Respondent. There is no dispute on duty paying nature of the either. He further submits a letter dated 11.4.1994 addressed by the Respondent to the address to the Superintendent, Commissioner of Central Excise, Belpahar wherein the Respondent has requested the Superintendent to verify the capital goods for which they have filed the declaration to enable them to take credit of the same. He has also submitted that the inputs were received by the Respondent prior to 30.6.1994 and entries were made in RG-23A Part-I prior to said date whereas entries were RG-23 Part-II were made after 30.6.1994 and a such there is no violation of Notification No. 16/94. He relied upon this Bench decision in their own case in Order No. S-1293/A-1345/KOL/2002 dated 12.11.2002. He submits that in view of this Tribunal’s decision in their own case the appeal filed by the Revenue be dismissed and the order of the Commissioner (Appeal) be upheld.
6. We have gone through the records and the submissions made by both the sides. There is no dispute that credit as the gate passes issued prior to 1.4.1994 has been taken after 30.6.1994. We find that the Larger Bench in the case of Montari Industries Limited referred to above has held that Modvat credit can be availed on the gate passes issued before 1.4.1994 but before 30.6.1994 and not thereafter in view of Notification No. 16/94-CE (NT). Similar view was also held by this Tribunal in SAIL v. Commissioner of Central Excise, Jamshedpur referred to above. The decision of this Bench relied upon by the Advocate of the Respondent is a Single Member bench decision whereas the above decisions are either by Double Member bench or by the Larger Bench. Keeping the above in view, we set aside the order of the Commissioner (Appeal) referred to above.
We allow the Appeal filed by the Revenue.