Full Judgment
1. The facts in brief are that respondent is manufacturing excisable goods fabricators falling under Chapter 84 of Tariff Act under the Excise License. The respondent availed Mod vat credit of Rs. 24030 on the strength of gate pass, endorsed more than twice which is not proper duty paying document, and took notional credit of Rs. 1702 at a later date in contravention of Rule 57B of Central Excise Act, Superintendent Central Excise Range III issued show cause notice on 19.5.92 to show cause why Central Excise duty of Rs. 25,732 should not be demanded and recovered under Rule 571, and why penalty should not be imposed under Rule 173Q of Central Excise Rules. The respondent replied it on 11.6.92. Personal hearing was held on 23.2.92. Respondent was heard, Excise Consultant Shri B.D. Birari and Shri D.D. Pradhan Executive Administrator represented it. After perusal of material on record, Order-in-Original was passed confirming the demand, penalty of Rs. 7,000 was imposed by Assistant Collector, Central Excise Thane III on 1.4.93. In the appeal by respondent, Collector (Appeals) set aside it lowing the appeal. Hence this appeal.
2. The Learned JDR Shri K.L. Ramteke has argued in support of appeal that Collector has erred in ignoring Trader's Endorsement. Board Circular of 9.4.90 restricting to two endorsements is on the basis of Tribunal decision SBS Organic Pvt. Ltd. in 1990 (45) ELT 791. No differentiation is made in endorsements. Board Circular would have been clear, it wanted. There is no provision to take notional credit at later date than the receipt of goods. Reference is pending in High Court, made by this Bench and decision thereon is awaited, Respondent is absent inspite of notice. No communication or representation is made.
3. Perused the orders of lower authorities, appeal memorandum and Rules 57A and 57B of Central Excise Act and the case laws referred therein.
The stand of respondent in reply to show cause notice is that it is silent as to under which rule Modvat credit is not admissible, when GPs are endorsed more than twice. Inputs received should be duty paid in character, and to show it duty paid documents accompany. It need not be in the name of receiver of inputs under Rule 57A relation between the two should be established. Name of the consignee is not the sole factor to establish it. Endorsement on the GP is one such factor when it is accepted, number of endorsements are immaterial so long as it is genuine. Restricting the endorsement to two only can be laid down by making a rule. There is no bar to take notional credit after the receipt of inputs, at a later date. Show cause notice is misconceived.
There are no grounds to impose penalty as there is no question of removal or any attempt with an intent to avoid duty.
4. Perused the orders of lower authorities and appeal memorandum. The grounds of appeal are not convincing. Taking notional credit within a particular period is to be fixed by a rule, and not other way. Pending reference of question of law before High Court is not a ground to set aside impugned order. The discussion in para 4 of the impugned order, and conclusion is based on Rule 52A, 57G(2) and precedent order of Tribunal in SBS Organics (P) Ltd. in and Mysore Lac and Paints , which prevails over Board Circular. These two rulings clearly covers the issue in this case. There are no satisfactory grounds to set aside the impugned order. So I pass the following order.
1. For the reasons discussed above, appeal cannot be allowed. It is rejected.