ORDER
V.P. Gulati, Member (T)
1. These two appeals arise out of the common impugned order. The Revenue is aggrieved against the MODVAT Credit allowed to the respondents which was taken on the strength of the gate passes which had been endorsed twice and also on the strength of the subsidiary gate passes endorsed once. The plea is that at the relevant time between September, 1988 to December, 1988 when the credits were taken, the documents prescribed for the purpose of MODVAT Credit under Rule 57G did not cover G.P. Is which had been endorsed twice as also the subsidiary gate passes which have been endorsed even once. The learned Collector in his order has held that inasmuch as the Board by issue of Trade Notice 81/89, dated 8-5-1989 had allowed the facility of MODVAT Credit being taken based on the G.R Is endorsed twice as also the subsidiary gate passes were also notified as relevant document, by issue of Trade Notice No. 38/89, dated 24-2-1989 for the purpose of MODVAT Credit, this Trade Notice should be considered clarificatory in nature and therefore these documents namely the gate passes endorsed twice and the subsidiary gate passes endorsed once would also be taken to be valid documents for taking MODVAT Credit under Rule 57G even during the period prior to the issue of these Trade Notices. It has been urged by the learned Departmental Representative that in terms of Rule 57G, statutorily only such of those documents as specified under rules or as notified by the Board by notification issued under Rule 57G can be taken to be valid documents for the purpose of taking MODVAT Credit and inasmuch as the documents in the case of the appellants were not notified so at the relevant time, the MODVAT Credit should not have been allowed based on these documents. It was urged that the notification could not have retrospective effect and he has pleaded that the learned lower authority was in error in having allowed the MODVAT Credit based on the documents in question. He has, therefore, prayed for setting aside of the order of the learned lower authority.
2. The learned Advocate for the appellants produced a copy of Page 1 of a publication which incorporates Trade Notice No. 99/88, dated 20th July, 1988, under which the MODVAT Credit has been allowed based on the gate passed endorsed twice. He has pleaded that the Trade Notices relied upon by the learned lower authority and the one which was issued by the Collectorate should have been issued under the authority of some notification issued. The notification, therefore, under which the gate passes endorsed twice have been notified as valid document for taking MODVAT Credit must have been issued sometime before 20th July, 1988 and inasmuch as the credit taken by the appellant was after the date, on this account the appellants will be eligible to take MODVAT Credit during the period September 1988 to December 1988. The learned Departmental Representative could not throw any light on the copy of the page which is from a published literature. In view of the evidence produced it is to be held that at the relevant time the gate passes which were endorsed twice were notified documents for the purpose of MODVAT Credit under Rule 57G. In case this position is not found to be correct by the Revenue they can move an application for rectification of the mistake and for recalling of the order. In regard to the plea of the respondents that even the subsidiary gate pass could be endorsed for the MODVAT Credit purposes, no evidence has been produced before us. There was no notification covering such contingency under Rule 57G for the purpose of taking MODVAT Credit. The respondent’s Advocate has pressed into service the ruling of the West Regional Bench in the case of SBS Organics Pvt. Ltd. v. Collector of Central Excise & Customs, Vadodam, reported in 1990 (45) E.L.T. 701 (Tribunal), wherein the Tribunal has held as under :
“As seen from the Trade Notice cited by the learned advocate, it is evident that the Government is keen to extend the Mod vat credit so long as the goods in factory packed condition are covered by the gate passes are received by the parties intending to avail Modvat Credit … the department is entitled to make verification or investigation with regard to the genuineness of the gate pass and also on the question whether gate pass has been utilised for availment of Modvat Credit at the earliest stages. In this case no such inquiry appears to have been conducted and the Modvat Credit has been denied only on the ground that more than that of permitted endorsements have been made, in the gate passes. Such an order cannot be sustainable in the context of the scheme of Modvat Credit read along with the relaxation made by the Board. We therefore set aside the order passed by the authorities below and permit availment of credit and while doing so, we allow the liberty to the Assistant Collector to cause any inquiry or investigation to satisfy himself about the genuine nature of the gate passes and also about the non-utilisation of the gate passes at the earlier stages of endorsements for availment of Modvat Credit.”
We observe that the statute provides for certain documents as evidence of payment of duty which are required to cover the consignments for the purpose of taking Modvat Credit and has delegated the powers to the Board to specify any other documents also for the purpose. The power has been vested in the Board taking into consideration the interest of the assessees and also the Revenue interest while notifying such documents which can be accepted. It is left to the Board taking into consideration the capacity of the Department for verification and exercise of control and after taking into consideration possible mis-use to notify any further documents other than those mentioned under Rule 57G. The Department, therefore, has to devise the procedure for verification etc. only from the date of issue of the notification. While it can be said that the purpose of the documents evidencing the payment of duty is to ensure that the credit taken is in fact equal to the duty paid in respect of the very goods for which Modvat Credit has been taken, it does not follow that any documents evidencing payment of duty could be accepted as valid documents for the purpose of taking Modvat Credit.
The Department would be put in a difficult position as they may have to go to great lengths to verify in each case to verify that the duty in fact has been paid. When the prescribed documents alone are relied upon by them for the purpose of taking Modvat Credit, the Department can be taken to have devised the procedure for verification and against any mis-use of such documents and therefore any relaxation given at any time can be taken to be only prospective. In view of the above, therefore, we hold that the Modvat Credit in respect of the subsidiary gate passes which have been further endorsed was not admissible and to that extent the learned lower authority’s order is therefore not maintainable. We therefore partially allow the plea of the Department in the above terms.