TaxTMI 
TaxTMI 
2018 (12) TMI 771
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....t by the railways as per the terms of the agreement. One of the main inputs used in the manufacture of the sleepers is Malleable Cast Iron Inserts. In each sleepers, 4 (four) Nos. of MCI Inserts were embedded at the time of casting of the sleepers. Under the above mentioned agreement the Railway Authorities agreed to provide the MCI Inserts required for use in the manufacture of the sleepers, free of cost to the respondent. Accordingly, the Railway Authorities placed purchase orders on the manufacturers of the MCI Inserts for supply of MCI Inserts to the respondent's factory at Panagarh. The present appeal relates to the Modvat Credit of Rs. 46,07,832/- availed by the respondent on 9,21,110 Nos. of MCI Inserts received by the respondent during the period May, 1991 to March, 1992. The MCI Inserts were received under the cover of the proper Gate Passes evidencing payment of Central Excise duty thereon. Since the purchase orders to the respective manufacturers for supply of the MCI Inserts, were placed by the Railway Authorities, the Gate Passes were made in the name of the Permanent Way Inspector (PWI), Track Depot, Eastern Railway, Panagarh. The said Track Depot of the PWI and the f....
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....tire raw material (inputs) covered under the gate pass was transferred to the manufacturer availing of Modvat relief and provided that the person (in whose name the gate pass was made) made a suitable endorsement on the reverse of the gate pass. He also submitted that the circular dated 10.04.1986 is ex-facie in conflict with the first proviso to Rule 57G(2) of the Central Excise Rules, 1944 in as much as it seeks to restrict the scope of the said First Proviso to Rule 57G(2) and is thus inapplicable being invalid and untenable as per settled law on the issue. In support of his submission he relied upon the decision of the Hon'ble Supreme Court in the case of Sandur Micro Circuits Ltd. vs. Commissioner of Central Excise [2008(229) ELT 641 (SC)] 3. Heard both sides and perused the appeal records. 4. I find that the only dispute in the instant case is the requirement of endorsement as per Circular dated 10.04.1986 not being complied prior to availing the credit. 5. In the present case, there is no dispute that - (i) the MCI inserts were actually received and used by the respondent in the manufacture of dutiable final products viz. Concrete Sleepers. The show cause notice ....
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....al Commissioner. The Additional Commissioner has himself held that the Respondent was entitled to restoration of the credit once the Gate Passes were endorsed on 6.2.1992 and 16.12.1992. 8. I further find that Commissioner (Appeals) has rightly held are as follows: "even if it is considered that endorsement on Gate Passes are required for availing MODVAT credit, I am of the opinion that when receipt of the inputs in appellant's factory, use of the inputs for the manufacture of their finished products, and duty paid nature of the said inputs are not in dispute, such non-endorsement is a procedural lapse which can be easily rectified by remedial measure." 9. I find that the credit is allowable to the respondent as per the instructions issued by the CBE&C by its Circular No.441/7/99-CX dated 23.02.1999. By the above mentioned circular, the Board directed the Central Excise Authorities to allow credit of the duty paid on inputs ignoring minor procedural lapses in the Invocie/documents based on which the credit is taken if it is proved that the inputs have suffered duty and were used in the process of manufacture. The Board further directed that all pending cases may be dispose....
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....se. In fact, when the goods were sent directly to the appellant's factory under the cover of invoices issued by the manufacturers under the provisions of Rule 52A and under the direction of the Railways, no endorsement as such was required to be made by the Railways on the said invoices." 11. I find that in the Grounds of Appeal, it is wrongly contended that in the instant case, the goods were originally consigned by the manufacturers of the said inputs, to the Railway department, as the original consignee and the Railway department, subsequently, sent the goods as mentioned in the Gate Passes to M/s. Tantia Concrete Products Ltd. (Presently M/s. GPT Infraprojects Ltd.) for manufacture of Prestressed Concrete Sleepers without being duly endorsed in the favour of the said assessee. 12. I find that the contention raised by the department is contrary to the findings of the Adjudicating Authority, in the Order-in-Original dated 17.09.2010. The relevant portion whereof is set out below for ready reference:- "4.7. I observe that the position is quite similar here where the goods have been received directly from the supplier at the instruction of the purchaser of the goods i.e. t....
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.... assessee has relied upon the following decisions: (i) Sandir Micro Circuits Ltd. vs. Commissioner of Central Excise, [2008 (229) ELT 641 (SC)], wherein in para 5 of the judgment the Hon'ble Supreme Court has held as under: "5. The issue relating to effectiveness of a Circular contrary to a Notification statutorily issued has been examined by this Court in several cases. A circular cannot take away the effect of Notifications statutorily issued. In fact in certain cases it has been held that the Circular cannot whittle down the Exemption Notification or hit it down. In other words, it was held that by issuing a circular a new condition thereby restricting the scope of the exemption or restricting or whittling it down cannot be imposed." (ii) Tata Teleservices Ltd. vs. Commissioner of Customs, [2006(194) ELT 11 (SC)], wherein a Three Member Bench of the Hon'ble Supreme Court observed and held as under: "10. ............................The Bombay Bench was also correct in its conclusion that the circular sought to impose a limitation on the exemption notification which the exemption notification itself did not provide. It was not open to the Board to whittle down the exem....