MANGALORE REFINERY AND PETROCHEMICALS LTD. Vs. CCE, MANGALORE

JUDGEMENT

(1.) The assessee has preferred this appeal challenging the order passed by the Tribunal holding that the assessee is ineligible to avail Cenvat credit as the said Cenvat credit was availed after a lapse of six months of the date of issue of bill of entry following the decision of the Larger Bench on a reference to it on the aforesaid question of law. The assessee M/s. Mangalore Refinery and Petrochemicals is a public sector undertaking being the subsidiary of Oil and Natural Gas Corporation Limited. It refines crude petroleum oil at their oil refinery in Mangalore and also manufactures various petroleum products. The assessee is claiming Modvat credit on eligible capital goods and inputs since its inception of the scheme in the year 1986. In the month of September, 1999, the assessee took Modvat credit of Countervailing Duty (CVD) paid on various inputs imported during April to December, 1998.

(2.) The jurisdictional Superintendent of Central Excise issued a notice dated 27-3-2000 and a Corrigendum dated 3-4-2000 to the assessee calling upon them to show cause as to why the credit amounting to Rs. 2,15,72,897/- should not be disallowed on the ground that the credit had been availed after 6 months from the date of issue of the Bill of Entry held to be the same as the date of payment of CVD. The assessee submitted a detailed reply justifying the credit claimed. However, the original adjudicating authority by his Order-in-Original dated 31-8-2004 allowed part of the credit and disallowed the Modvat credit availed on the Bills of Entry on the ground that the credit was availed after 6 months from the date of issue of bills of entry. Aggrieved by the said order, the assessee preferred an appeal under Section 35-B of the Central Excise & Salt Act, 1944 (hereinafter referred to as 'the Act' for short) before the appellate Tribunal, Bangalore. In view of the conflicting opinions on the aforesaid question the Tribunal referred the matter to a Larger Bench to decide the following questions of law:

(3.) The learned counsel appearing for the assessee assailing the impugned order contended that sub-rule (5) of Rule 57G of the Central Excise Rules, 1944 (for short hereinafter referred to as 'the Rules') speaks of 6 months from the date of issue of any document specified in sub-rule (3) as the period of limitation. Therefore, the condition precedent for application of the said Rule is it should be from the date of issue of any document. The document referred to under sub-rule (3) except the Bill of Entry are the documents which are issued by the seller. In the case of Bill of Entry it is the purchaser-assessee who files the said document and therefore the said period has no application to the bill of entry. Consequently he contended that in the case of Bill of Entry after the Bill of Entry is filed with the customs authorities under Section 46 of the Customs Act, 1962, on receipt of such Bill of Entry the authority after examination and deciding the duty if any eligible on such goods shall be assessed and thereafter the said Bill of Entry is returned to the purchaser/assessee for payment of duty. It is only after the assessee-purchaser pays the duty as assessed the authority, pass an out of charge order and hand over the triplicate copy of the Bill of Entry along with the out of charge order to the assessee and on production of the said out of charge order the goods imported would be released by the authorities for home consumption. Therefore it is the date from which the duty is paid and out of charge order is passed and handed over to the assessee, the period of 6 months as stipulated in sub-rule (5) of Rule 57G is to be computed, and not 6 months from the date of the assessee handing over the Bill of Entry as required under Rule 46 of the Customs Act.