2018 (7) TMI 911

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....iled its declarations on 15.03.1994 which was acknowledged by the Department vide letter dated 21.03.1994. They also declared the stock of inputs lying in the refinery as on 01.03.1994 by its letter dated 30.03.1994. Show Cause Notice dated 21.09.1994 was issued to disallow Modvat Credit of Rs. 1,21,93,989/- availed during the period from March to July 1994. It was further alleged that the bills of entry were in the name of "IOC Limited, 1, Syed Amir Ali Avenue, Calcutta" where as only a part of the goods covered by those Bills of Entry were received by the appellant at its Barauni refinery. It is also the case of the department that the Modvat Credit was taken on Photostat copies of Bills of Entry/GP-Is or certified copies or duplicate or triplicate copies thereof. Show Cause Notice also alleged that Modvat Credit was availed by the appellant on stock available with it at the time of filing declaration under Rule 57G without obtaining prior permission of the jurisdictional Assistant Collector under Rule 57H. The adjudicating authority vide Order-in-Original dated 06.02.1997 allowed the benefit w.e.f. 21.03.1994 (i.e., the date of acknowledgement of the declaration under Rule 57G a....

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....ith the following remarks, which is reproduced below: "After clarifying the law that the Credit is available in respect of the goods lying in stock as on 1.3.94, we remand the matter to the adjudicating authority for examining the appellant company's entitlement to Credit in the light of the observations made by us as above." Vide the impugned denovo order, the Order-in-Original No. 05/Denovo/Commissioner/2008 dated 31.03.2008, the Commissioner, Central Excise, Patna passed the following order: "ORDER a. I disallow the credit amounting to Rs. 1,21,93,989/- (Rupees one crore twenty one lakh ninety three thousand nine hundred and eighty nine) to M/s Indian Oil Corporation, Ltd, Barauni Refinery, Barauni which shall be paid by M/s Indian Oil Corporation, Ltd, Barauni Refinery as per the provisions of Rule 571(1)(ii) of Central Excise Rules, 1944. b. I impose a penalty amounting to Rs. 1,21,93,989/- (Rupees one crore twenty one lakh ninety three thousand nine hundred and eighty nine) on M/s Indian Oil Corporation, Ltd, Barauni Refinery, Barauni under Rule 173Q(1)(bb) of Central Excise Rules, 1944. [M.S.Badhan] Commissioner Central Excise Patna" He....

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....cise. Further, appellants have already deposited the amount of Rs. 11,98,061/-. On perusal of records we find that the appellant's Calcutta office i.e. IOC Limited, 1, Syed Amir Ali Avenue, Calcutta clears all imported inputs for their refinery situated at Barauni, Haldia, Guwahati and Digboi and after clearance, the inputs are sent to the refineries based on their individual requirements and the Calcutta office of the appellant, duly registered with the Central Excise Authorities, issues its own invoice/document/certificate in favour of the refinery to whom the inputs are sent. It has also been contended before us by the appellant that Modvat Credit was availed on the imported inputs based on certificate/ Photostat copies of bills of entry (duly certified by the Customs Authorities at Calcutta) and all consignments also carried certificate from the appellant's Calcutta Office and all these were valid documents for the purposes of availing Modvat Crdit in terms of Trade Notice No.106/92 dated 11.11.1992 and Trade Notice No.79/92-CE dated 28.12.1994. The relevant paragraphs of the earlier adjudication order dated 06.02.1997, wherein the ld. Adjudicating Authority in his discussions ....

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....f Agarwal Metal Works -Vs.- CCE, New Delhi held that, "admittedly Hindustan Copper Ltd. And Hindustan Zinc Ltd. are public sector undertakings and the credit taken on the strength of certificate issued by them is sustainable in law". In the above case the credit has been allowed to M/s Agarwal Metal Works. Now the satiation is that if the credit could be allowed to the units other than owned by the importer, on the basis of the importer's certificate which happens to be a P.S.U. there should be no reason to disallow the same to those which happens to be their own units." 6. We also find that so far as the inputs lying in stock are concerned, the Commissioner allowed the benefit w.e.f. 21.03.1994 (i.e., the date of acknowledgement of the declaration and not w.e.f. 01.03.1994). In so far as the allowability of Modvat Credit on the basis of certificates issued by the appellant's Calcutta Office alongwith certified Photostat copies of bills of entry are concerned, the Commissioner decided the said credits in the appellant's favour but limited the allowability of the said credit only on the stock lying as on 21.03.1994 whereas the appellant had claimed the same on the stock lying as ....