V.P. Gulati, Member (T)
1. This appeal has been filed by the Revenue against the order of the Commissioner of Customs & Central Excise (Appeals), Trichy. Under the impugned order, the learned lower authority has allowed the appellants the benefit of MODVAT Credit in respect of the goods which were received under cover of gate passes which had been endorsed three times. At the relevant time the notification issued by the Board under Rule 57G permitted the facility only where the gate passes were endorsed only once. The learned lower authority has relied upon the judgment of the West Regional Bench in the case of SBS Organics Pvt. Ltd. v. CCE reported in 1990 (45) E.L.T. 701 cited before it while allowing the benefit.
2. The learned JDR for the Department has pleaded that the MODVAT Credit could be taken only when the inputs were received under the cover of specified documents under Rule 57G of the Central Excise Rules or such of the documents as may be notified by the Board under Rule 57G. He pleaded that while gate passes are specified as one of the documents under Rule 57G itself, by notification the Board has allowed the benefit to be given also to the goods which were received under gate passes which had been endorsed once. He has pleaded in the present case admittedly the gate pass had been endorsed three times and therefore it was not an authorised document for the purpose of taking MODVAT Credit.
3. The learned Advocate for the appellants relied upon the judgment of the West Regional Bench referred to supra. He also pleaded even if there was some procedural infraction the appellants should not be denied the substantial benefit and cited the judgment in the case of Vikrant Tyres reported in 1986 (26) E.L.T. 652 1 Should be Vikarant Tyres reported in 1986 (26) E.L.T. 65 – Ed.
4. I have considered the pleas made by both the sides. It is observed that in a similar case which had come up before this Bench, the judgment of the West Regional Bench was cited before us and we have held that in view of the provisions of Rule 57G, the documents as prescribed by the Board are the only valid documents for the purpose of taking MODVAT Credit. We have in our Order No. 662/1995, dated 24-8-1995 in the case of Collector of Central Excise v. M/s. Jai Bhavani Steel Enterprises (P) Ltd. [reported in 1996 (83) E.L.T. 537 (Tribunal)] held as under, after taking note of the judgment of the West Regional Bench referred to supra:
“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.”
I observe that the Hon’ble Bombay High Court before whom a circular issued by the Board [was placed] that benefit of MODVAT Credit will not be allowed based on the authenticated photocopies of the original Gate Pass in the case of Bombay Goods Transport Association v. UOI reported in 1995 (77) E.L.T. 521 have held as under:
4. “We do not see any merits in the Writ Petition. Rule 57G falls under Chapter VAA which deals with credit of duty paid on excisable goods used as inputs. Rule 57G prescribes a procedure to be followed by the manufacturer who claims proforma credit of duty under MODVAT. Under Rule 57G a manufacturer of the final product is required to submit documents including extracts of Part I and Part II of Form RG 23A to the Superintendent of Central Excise every month who thereupon shall after verifying their genuineness, deface such documents and return the same to the manufacturer. One of the several documents evidencing payment of duty is the Gate Pass. By the impugned Circular dated 15th December, 1992 the only change which is brought about is that no credit would be allowed based on Certified Copy or Authenticated photo copy of the original Gate Pass I. It is for the claimant to prove by such documents as are required to be submitted that duty has been paid on excisable goods used as Inputs. One of such documents required to be submitted being the Gate Pass. In other words, if genuine documents like invoices, extracts of Part I and Part II of RG 23A Form and the documents mentioned therein are produced before the Competent Authority evidencing proof of payment of duty on inputs then he would be entitled to proforma credit under MODVAT. The said impugned Circular dated 15th December, 1992 as well as the Trade Notice dated 27th January, 1993 are therefore in consonance with the Rule 57G(4) (as newly amended). In the circumstances, there is no merit in the above contention raised on behalf of the Petitioners.”
From the above it could be seen that the appellants have to establish their claim to MODVAT Credit based on the documents prescribed and not any other documents. In case of loss of a document, however, the Hon’ble High Court has in para 7 held that it was for the appellants to prove that the duty had been paid on the inputs under the rules. In view of what we have held in our order above and the ruling of the Hon’ble Bombay High Court, I hold that the learned lower authority was in error in allowing the MODVAT Credit under the Gate Pass which had been endorsed thrice and I therefore allow the appeal.