1993 (9) TMI 230 - AT - Central Excise

Appellate Tribunal emphasizes eligibility over procedural technicalities for modvat credit claims

SARDAR ALUMINIUM FACTORY Versus COLLECTOR OF CENTRAL EXCISE, DELHI

The Appellate Tribunal CEGAT held that failure to comply with procedural requirements should not bar the availment of modvat credit if the party is ... Stay/Dispensation of pre-deposit Issues: Interpretation of Rule 57G(2) regarding endorsement on bill of entry for availing modvat credit; distinction between gate pass and bill of entry for claiming refunds; adherence to procedural formalities for modvat credit eligibility.In this judgment by Appellate Tribunal CEGAT, the issue revolved around the interpretation of Rule 57G(2) concerning the endorsement on the bill of entry for the purpose of availing modvat credit. The appellant, represented by Shri J.S. Agarwal, argued that the goods were imported by another entity and then sold to them in original packings, with the necessary endorsement by the Superintendent as evidence. Reference was made to a letter from the Asstt. Collector (Audit) clarifying the acceptance of one endorsement as a duty paying document for modvat. The appellant cited precedents, including a Tribunal judgment and a stay order, emphasizing that multiple endorsements on gate passes are permissible for modvat credit as long as the goods are in factory packed condition. The Tribunal's consistent stance on procedural compliance not being a bar to modvat credit eligibility was highlighted.The Respondent, represented by Shri K.N. Gupta, contended that there is a distinction between gate pass and bill of entry, with the former accompanying the goods and the latter's triplicate copy being relevant for subsequent claims like refunds. Emphasis was placed on the detailed procedure outlined for availing modvat credit on the bill of entry, and non-compliance with these instructions should disqualify the appellant from claiming such credit. Reference was made to a Trade Notice followed by Customs Houses and the timing disparity between the Asstt. Collector's order and the case period under consideration.After hearing both sides, the Tribunal, per G.R. Sharma, Member (T), refrained from delving into the case's merits but concurred with the Tribunal's consistent position that failure to comply with procedural requirements should not prevent the availment of modvat credit if the party is otherwise eligible. Consequently, the Tribunal waived the pre-deposit of duty and penalty, amounting to Rs. 83,928 and Rs. 10,000, respectively, and ordered the stay of recovery proceedings pending the appeal's disposal. The judgment underscored the importance of eligibility over procedural technicalities in modvat credit claims, aligning with the precedents cited and the Tribunal's established approach.