2001 (1) TMI 379 - AT - Central Excise

Tribunal rules in favor of Revenue on Modvat credit, seeks opinion on fire bricks from Delhi High Court.

The Tribunal allowed the Revenue's reference application on Modvat credit for original invoices and gate passes. The question regarding fire bricks was ... Modvat credit admissibility on original invoices versus duplicate invoices - Validity of gate passes issued before 1-4-1994 and endorsed thereafter as documents for availing Modvat credit - Whether fire bricks used for lining furnaces constitute parts of machines and are therefore excluded from the definition of inputs under Rule 57AModvat credit admissibility on original invoices versus duplicate invoices - loss of duplicate invoice in transit - Reference whether Modvat credit can be taken on original invoices under the Rules is to be referred to the High Court - HELD THAT: - The Tribunal recorded that a Larger Bench decision in M/s. Avis Electronics held that Modvat credit is admissible only on duplicate invoices except where the duplicate is lost in transit and the Assistant Collector is satisfied, in which case original invoices may be permitted. Given that position, the question of law whether credit can be taken on original invoices under the relevant rules (including Rule 57G read with the Notification and Rule 52A) arises for authoritative determination and is accordingly referred to the Hon'ble Delhi High Court for consideration. [Paras 4]Question No. (i) referred to the Hon'ble Delhi High CourtValidity of gate passes issued before 1-4-1994 and endorsed thereafter as documents for availing Modvat credit - Reference whether gate passes issued before 1-4-1994 and endorsed after that date are valid documents for availing Modvat credit is to be referred to the High Court - HELD THAT: - The Tribunal noted that identical questions concerning the validity of such gate passes have already been the subject of reference in prior matters (for example in Moosa Haji Patrawala and other cases) and are pending before various High Courts. In view of the multiplicity of pending references and the need for authoritative determination, the question is referred to the Hon'ble Delhi High Court for its considered opinion. [Paras 5]Question No. (ii) referred to the Hon'ble Delhi High CourtWhether fire bricks used for lining furnaces constitute parts of machines and are therefore excluded from the definition of inputs under Rule 57A - Reference whether fire bricks used in furnaces are to be treated as parts of machines and thereby excluded from inputs under Rule 57A is to be referred to the High Court - HELD THAT: - The Tribunal observed that an identical question has already been referred in earlier proceedings (notably Union Carbide) and a Larger Bench reference exists. As the issue raises a point of law concerning the scope of 'inputs' and the exclusion of parts of machines under the Explanation to Rule 57A, it is appropriate to obtain the Hon'ble High Court's opinion and the question is therefore referred. [Paras 6]Question No. (iii) referred to the Hon'ble Delhi High CourtFinal Conclusion: The reference application is allowed; the three questions framed by the Revenue are referred to the Hon'ble Delhi High Court and the Registry is directed to draw up the statement of facts and forward the papers to the Court. The Revenue filed an application for reference regarding Modvat credit on original invoices, gate passes, and fire bricks. The Tribunal allowed the reference application for questions on Modvat credit on original invoices and gate passes. The question on fire bricks was also referred to the High Court. The reference application was allowed, and the case was forwarded to the Delhi High Court for opinion.