TaxTMI 
TaxTMI 
2004 (8) TMI 124
X X X X Extracts X X X X
X X X X Extracts X X X X
....d question is whether Modvat credit could be taken on "the invoice-cum-challans of M/s. Steel Authority of India Ltd. which have been endorsed twice". 3.We have perused the records and have heard the learned Counsel representing the assessee and learned SDR. 4.The contention on behalf of the assessee is that this issue remains correctly decided in favour of assessees by the order of this Tribunal in the case of S.B.S. Organics Pvt. Ltd. v. Collector of Central Excise [1990 (45) E.L.T. 701 (Trib.)]. The Learned Counsel has drawn our attention specifically to the observations of the Tribunal in Para 4 of the Order. The Learned Counsel has also submitted that Rule 57G contains no bar against taking of Modvat credit against endorsed Gate Passes or the number of endorsements that may be made. Instead, the substance of the Rule is that an assessee "should take credit of the duty paid on the inputs received by him". Proviso to sub-rule (2) also states that credit may be taken against any of the prescribed documents covering the receipt of the goods. The learned Counsel also pointed out that even though the Board's Circular No. 1/89, dated 23-1-89 had stated that "the subsidiary gate pas....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rong availment of Modvat credit by the assessee on any procedural grounds, shall conduct enquiries with regard to duty paid nature of the goods at the suppliers end ensure that necessary information as mentioned in the Notification are available on the invoice and satisfies himself whether the goods have been used or are intended to be used as contemplated in the Modvat Rules. In case the assessee's invoice contains the details viz. description of the goods, assessable value, name and address of the factory or warehouse where the goods are to be received, and if the assessee has filed a declaration as contemplated in the Modvat rules, the Assistant Commissioner having jurisdiction over the factory would allow the credit of duty so paid after making enquiries as above. It should thereafter be ensured that Show Cause Notices are3. not issued for procedural lapses as mentioned in the Notification without making proper enquiries. Wherever the Assistant Commissioner, after making due enquiry, is satisfied that the Modvat credit taken by the assessee is incorrect, adjudication proceedings in the normal course should be initiated. Efforts, however, should be directed toward reduction of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... clarification in particular Circular dated 441/7/99 CX., dated 23-2-99 emphasizes that claims are not to be rejected merely on procedural grounds, but only after proper enquiry into the duty paying aspect and that all pending cases are covered this instruction. The appellant's is a pending case and there is no allegation that the input consignment in question was not duty paid. The objection raised is purely a procedural one, that the consignment was purchased under a 2nd endorsement of sale document, namely, challan-cum-invoice. It is also not disputed that the endorsement was in respect of full consignment covered by the document and not part consignment. In these facts and circumstances, in terms of the instructions of the Board themselves, the appellant's claim is required to be allowed. 7.Coming to the decisions of this Tribunal on the issue of endorsed Gate Passes, the Tribunal expressed the following view in S.B.S. Organics Pvt. Ltd. (supra). We have carefully considered the arguments form both sides."4. The main issue to be decided in this appeal is whether the denial of Modvat credit in respect of inputs received under gate passes endorsed in favour of the appellants af....
X X X X Extracts X X X X
X X X X Extracts X X X X
....permitting a number of endorsements would involve in considerable administrative burden and the gate passes are likely to be abused. In this case, it is contended by the other side that the previous endorsements have been made not by any other manufacturer who could utilize this inputs but only by intermediaries in the trade channel. In any case, the department is entitled to make verification or investigation with regard to the genuineness of the gate pass and also on the question whether gate pass has been utilized for availment of Modvat credit at the earliest stages. In this case, no such enquiry appears to have been conducted and the Modvat credit has been denied only on the ground that more than that of permitted endorsements have been made in the gate passes. Such an order cannot be sustainable in the context of the scheme of Modvat credit read along with the relaxation made by the Board. We, therefore, set aside the order passed by the authorities below and permit availment of credit. While doing so, we allow the liberty to the Assistant Collector to cause any inquiry or investigation to satisfy himself about the genuine nature of the gate passes and also about non-utilizat....