ORDER
K.D. Mankar, Member (T)
1. This is a revenue appeal directed against the order-in-appeal passed by the Commissioner (Appeals). The show cause notice issued to the respondents alleged that the respondents have taken credit of CVD on the basis of improper documents and thereby contravened the provisions of Rule 57G read with Rule 57A of Central Excise Rules 1944. It was mentioned that in the month of September 1999 they have availed the modvat credit of CVD amounting to Rs. 2,05,074/- on the basis of certificate dated 25/08/99 of the assessee, endorsed by the Customs authorities at Mumbai. This certificate did not appear to be in accordance with the Rule 57E of the Central Excise Rules 1944. Further, it is also alleged that the CVD was paid on demand by Customs authority for excess import of material under DEEC scheme and hence the same cannot be utilised as modvat credit as per Rule 57E(3) of the Central Excise Rules, 1944.
2. The Assistant Commissioner upheld the show cause notice and accordingly confirmed the duty demand and penalty of Rs. 20,000/- was also imposed on the appellants. The Commissioner (Appeals) set aside the order, hence the instant appeal to the Tribunal by the revenue.
3. Heard both sides.
4. The first ground is that the payment of CVD on the input refers to excess imports. So far as this ground is concerned the Commissioner (Appeals) has recorded in his impugned order that, this is not a case of a default and evasion of Customs duty, in order to attract disqualification contained in Rule 57E(3). Under Rule 57E(3), in case the recovery of differential duty on the inputs is based on the suppression of facts, misstatement evasion etc. then despite payment of such additional duty amount, the user is not eligible to take credit of such amount. The Commissioner (Appeals) held that such a disqualification will not apply in the instant case because the importer (respondents) on their own approached the DGFT, to foreclose the licence, as they were unable to complete the export obligation, which was outstanding.
5. So far as the certificate of duty payment endorsed by the appraiser is concerned, in a situation where import duty is required to be paid on the material which was initially cleared without payment of duty, there is no other document that can vouch for the authenticity of the payment of duty on the goods so cleared except the certificate which the respondents produced. The list of duty paying documents as specified in the Rule 57G of the Rules may not specifically refer to duty payment affected subsequently to, the clearance of the goods. However, the payment having been made on the basis of cash challan and duly certified by the concerned appraiser of the Customs House, it can not cease to be a duty paying document. In fact, it is the most primary document of duty payment the acceptance of which cannot be disputed, when the secondary document generated from primary duty paying document (cash challan) such as invoices of the traders and the dealers and godown keepers are being accepted as duty paying document.
6. On the basis of the above analysis, I find that the appeal filed by the revenue is without any merit and the same is rejected.
(Operative part pronounced in Court)