C.C.E. Vs. Ajit Cotton Ginning, P.D.S.R. - Court Judgment

Excerpt:
1. these are 12 appeals filed by the revenue against the common impugned orders dated 28-3-1996 passed by the commissioner (appeals), central excise, chandigarh.2. when these matters were posted for hearing none appeared on behalf of the respondents. shri y.r. kilania, learned jdr appearing for the revenue submitted that there are 31 appeals filed by the revenue against the common impugned order and out of 31 appeals, 19 appeals have come up for consideration before the tribunal on 25-9-1996 and after taking into consideration of the facts and circumstances of the case, the appeals filed by the department were dismissed upholding the views taken by the commissioner (appeals).3. the issue relates to denial of modvat credit. according to the department, parties in all these cases have wrongly taken modvat credit on the basis of the duty paid certificates given by m/s. indian oil corporation ltd., on their invoice-cum-challans when they were not authorised. it was the contention of the department that according to rule 57g, no credit shall be taken unless inputs are received in the factory under the cover of gate passes or ar 1, bill of entry in other documents as may be prescribed by central board of excise and customs.it was submitted on behalf of the revenue that commissioner (appeals) has erred in allowing modvat credit on the basis of the invoice-cum-challans having not been prescribed as proper duty paying documents.4. i find that the collector (appeals) in the impugned order has following the earlier order-in-appeal nos. 97-101/ce/chd/96, dated 15-2-1996. in that order it was observed that : "on going through the records of the cases i find that modvat credit has been availed by the appellants on the basis of delivery-challans cum invoices issued the branch offices/deposits the i.o.c. which contain all the required particulars regarding payment of duty. since the mineral oil are government controlled commodity and the prices of oil are administered by the government and; the oil companies being the central government public sector undertakings, there does not appear to be any fear of abuse of the modvat credit." while accepting the contention of the parties commissioner (appeals) observed that since then such documents are accepted as valid duty paying documents under rule 52a by the jurisdictional central excise authorities from where such documents are issued when there is no grounds for the officers in not accepting the same documents at the consignee's end for availing of modvat credit by the appellants. he also observed that based on the number of decisions by hon'ble cegat, he held in the number of appeals that mere technicalities should not come in the way of availing modvat credit which is the substantive right of the appellants provided the following ingredients are satisfied :- (i) that the inputs [have] been received in the factory of the assessee. (iii) that the inputs have been used in the manufacture of final products and however, in case of suspicion about the genuineness of the transaction, the assistant commissioner can get the documents verified from the originating central excise authorities and allow the modvat credit thereafter instead of straight away disallowing the modvat credit.5. i also find that similar appeals arising out of the common impugned order have come up for consideration before the tribunal on 25-9-1996 and the tribunal has rejected the appeals filed by the department upholding the impugned order as per order nos. a-2333-39/96-nb as well as order nos. a-2340-47/96-nb, dated 26-9-1996. in the facts and circumstances/following the ratio of the aforesaid decisions and in view of the judicial discipline, i accept the plea of the respondents and in the result, all the appeals filed by the revenue are hereby rejected.

Judgment:
1. These are 12 appeals filed by the Revenue against the common impugned orders dated 28-3-1996 passed by the Commissioner (Appeals), Central Excise, Chandigarh.

2. When these matters were posted for hearing none appeared on behalf of the respondents. Shri Y.R. Kilania, learned JDR appearing for the Revenue submitted that there are 31 appeals filed by the Revenue against the common impugned order and out of 31 appeals, 19 appeals have come up for consideration before the Tribunal on 25-9-1996 and after taking into consideration of the facts and circumstances of the case, the appeals filed by the Department were dismissed upholding the views taken by the Commissioner (Appeals).

3. The issue relates to denial of Modvat credit. According to the Department, parties in all these cases have wrongly taken Modvat credit on the basis of the duty paid certificates given by M/s. Indian Oil Corporation Ltd., on their invoice-cum-challans when they were not authorised. It was the contention of the Department that according to Rule 57G, no credit shall be taken unless inputs are received in the factory under the cover of gate passes or AR 1, bill of entry in other documents as may be prescribed by Central Board of Excise and Customs.

It was submitted on behalf of the Revenue that Commissioner (Appeals) has erred in allowing Modvat credit on the basis of the invoice-cum-challans having not been prescribed as proper duty paying documents.

4. I find that the Collector (Appeals) in the impugned order has following the earlier Order-in-Appeal Nos. 97-101/CE/CHD/96, dated 15-2-1996. In that order it was observed that : "on going through the records of the cases I find that Modvat credit has been availed by the appellants on the basis of delivery-challans cum invoices issued the branch offices/deposits the I.O.C. which contain all the required particulars regarding payment of duty.

Since the mineral Oil are Government Controlled commodity and the prices of oil are administered by the Government and; the Oil Companies being the Central Government Public Sector Undertakings, there does not appear to be any fear of abuse of the Modvat credit." While accepting the contention of the parties Commissioner (Appeals) observed that since then such documents are accepted as valid duty paying documents under Rule 52A by the Jurisdictional Central Excise authorities from where such documents are issued when there is no grounds for the officers in not accepting the same documents at the consignee's end for availing of Modvat credit by the appellants. He also observed that based on the number of decisions by Hon'ble CEGAT, he held in the number of appeals that mere technicalities should not come in the way of availing Modvat credit which is the substantive right of the appellants provided the following ingredients are satisfied :- (i) that the inputs [have] been received in the factory of the assessee.

(iii) that the inputs have been used in the manufacture of final products and However, in case of suspicion about the genuineness of the transaction, the Assistant Commissioner can get the documents verified from the Originating Central Excise authorities and allow the Modvat credit thereafter instead of straight away disallowing the Modvat credit.

5. I also find that similar appeals arising out of the common impugned order have come up for consideration before the Tribunal on 25-9-1996 and the Tribunal has rejected the appeals filed by the Department upholding the impugned order as per Order Nos. A-2333-39/96-NB as well as Order Nos. A-2340-47/96-NB, dated 26-9-1996. In the facts and circumstances/following the ratio of the aforesaid decisions and in view of the judicial discipline, I accept the plea of the respondents and in the result, all the appeals filed by the Revenue are hereby rejected.