Full Judgment
2. Ld. Counsel stated that the appellants were engaged in the manufacture of painted (printed) lacquered varnished sheets of various width falling under sub-heading 7210.30. The appellants were availing the benefit of MODVAT scheme by declaring the inputs used in the manufacture of the final products under Rule 57G. One of the inputs used in the manufacture of the above said final products is tin plates.
The appellants purchased the input i.e. tin plates from M/s Gaurav Sales Corpn., New Delhi vide Bill of Entry No. 008833 dt. 23.3.1992, 008833 dt. 23.3.1992, 009006 dt. 27.4.1992 and 009001 dt. 27.4.1992 respectively. While selling these inputs M/s Gaurav Sales Corpn.
endorsed all the relevant bilis of entry in favour of the appellants.
It was endorsed to the effect that the entire material covered under these Bills of Entry were sold to the appellants. The goods were received under the original packing condition from Gaurav Sales Corpn.
The affidavit sworn by M/s Gaurav Sales Corpn. shows that the entire goods covered under the bilis of entry were supplied to the appellants in original packing condition and no MODVAT credit was taken/availed against the goods covered under the above referred bilis of entry by them. However, the Deputy Collector disallowed the MODVAT credit and the Collector (A) upheld the order.
3. It was their contention that MODVAT can be availed against the endorsed bill of entry itself. The Board had issued various circulars and clarifications to the effect that MODVAT credit can be availed on the endorsed gate passes. Bill of Entry is similar to the gate pass.
Therefore, the procedure followed for availing MODVAT credit in respect of endorsed gate pass should be applicable in respect of endorsed bill of entry as well. It is totally erroneous to hold that the endorsed bill of entry is not a valid document for availing MODVAT credit. Even if some endorsement is made in the bill of entry the said bill of entry continues to remain as bill of entry. Therefore, the appellants have duly filfilled the condition stipulated under Rule 57G. The wordings of Rule 57G cover the gate pass, bill of entry and AR1. Enclosed (sic) Bill of entry would come under 'any other documents'. Tribunal's order in the case of CCE v. Goodlass Nerolac Paints is squarely applicable. Furthermore as long as receipt of inputs is properly accounted for in the MODVAT account the credit cannot be denied as held in the case of Arunachal Plywood Ind.
v. CCE . Moreover, Modvat credit cannot be denied for procedural lapses as held by Tribunal in the case of Parle Products Ltd. reported in 1991 (36) ECR 614. The Collector (A) has failed to follow the decision of the Tribunal in the case of Antal Rasayan v. CCE 1993 (46) ECR 466.
4. Ld. DR reiterated the department's viewpoint and submitted that the CBEC had prescribed a detailed procedure in r/o Modvat credit that could be availed on a Bill of Entry which requires obtaining of a 'Subsidiary Certificate' for Modvat credit availment. The procedure prescribed by the CBEC was within the ambit of Rule 57G and was intended to safeguard the revenue interest. It was published in ECR 1987 (Vol. 10) page 10/C (Paras 39.10-39.14) and the Bombay Central Excise Collectorate had brought it to the notice of the Trade vide Trade Notice No. 57/87 dt. 7.8.1987. Under Rule 57G(2) lst proviso, no credit can be taken unless the inputs are received in a factory under the cover of a Gate Pass, an AR-1, Bill of Entry or any other document prescribed by the CBEC evidencing payment of duty on such inputs. The endorsed Bill of Entry is neither a document figuring in Rule 57G nor a document prescribed by the CBEC for modvat purpose. Hence, the modvat credit by the party on the strength of endorsed Bills of Entry is recoverable under Rule 57(1).
5. I have considered the above submissions. I observe that in this case the modvat credit has been taken on the basis of an endorsed bill of entry. The department has not been able to show that the appellant's contention to the effect that the inputs were duty paid, a proper declaration had been filed and on receipt in the factory, the goods had been used in the manufacture of declared outputs was incorrect or wrong.
6. The Tribunal has already held in its earlier orders that endorsed Bills of Entry are acceptable and even otherwise it has been repeatedly held in a catena of orders that benefit cannot be denied on account of minor procedural infractions if substantial compliance with the essential requirements of the scheme could be shown and in this regard the appellants have rightly relied on Tribunal's orders. Therefore, respectfully following the ratio thereof, I set aside the impugned order and accept the appeal as already announced in the Open Court.