MRP LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) PURSUANT to Misc. Order No. 457/2006, dated 5 -6 -2006 (Referral Order) passed by the South Zonal Bench, Bangalore, we have been called upon to decide on the following issue: Whether Bill of Entry is a document "issued" for the purpose of applying the provisions of Rule 57G(5) and thus covered by Rule 57G(5) of the Central Excise Rules?

(2.) THE brief facts of the case, for our purpose, are that the appellants, manufacturers of petroleum products, had taken, during the month of September 1999, Modvat credit, in RG 23 A Part II, of countervailing duty (CVD) paid on various inputs imported during April to December 1998; that, by a show -cause notice dated 27 -3 -2000 as amended by corrigendum dated 3 -4 -2000, the jurisdictional Superintendent of Central Excise proposed to disallow the above credit on the ground that the credit had been availed after six months from the date of "issue" of Bill of Entry held to be the same as the date of payment of CVD; that the appellants contested the proposal by submitting that the delay in taking the above credit was on account of the delay on the part of Customs authorities in assessing and releasing the documents and also by relying on a decision of the Tribunal; and that, in adjudication of the dispute, the jurisdictional Commissioner vide Order -in -Original No. 10/2004, dated 31 -8 -2004 upheld the above proposal of the department and disallowed the entire Modvat credit of CVD on the ground of limitation in view of Sub -rule (5) of Rule 57G of the Central Excise Rules, 1944.

(3.) AT the final hearing stage of the appeal filed by the party against the above order of the Commissioner, the regular Bench, after hearing both sides, noted conflicting views of different Benches of the Tribunal on the question whether the time -bar provision contained in Sub -rule (5) of Rule 57G of the Central Excise Rules, 1944 was applicable to availment of Modvat credit of CVD paid on imported inputs, based on the appropriate copy of Bill of Entry prescribed under Sub -rule (3) of the said Rule. It was noted that, in the case of Bullows Paint Equipment Pvt. Ltd. v. CCE, Mumbai -VI 2001 (138) E.L.T. 1098 (Tri. -Mum.), a learned Single Member had held that as the expression "issue" used in Rule 57G(5) - reading thus : "Credit shall also not be taken by the manufacturer after six months of the date of issue of any document specified in Sub -rule (3).." - did not qualify the prescribed document viz. Bill of Entry and, as the date of filing of Bill of Entry had no relevance to the physical movement of the goods covered thereunder, the limitation prescribed under Sub -rule (5) of Rule 57G was not applicable to Modvat credit on imported inputs. The above view was followed by a Division Bench of the Tribunal in the case of Texmaco Ltd. v. CCE, Kolkata -III 2004 (175) E.L.T. 553 (Tri. -Kol). A subsequent Single Member decision in the case of Atul Ltd. v. CCE, Surat 2004 (175) E.L.T. 250 (Tri.Mum.) was also noted by the referral Bench and the same was also to the effect that a Bill of Entry was not a document "issued" by any authority and therefore the limitation of six months prescribed under Rule 57G(5) was not applicable in respect of Modvat credit taken on the basis of such document. The referral Bench itself was in agreement with the view taken in Bullows Paint Equipment case (supra). However, in keeping with judicial discipline, it chose to refer the issue to Larger Bench after noting contra decisions of coordinate Benches. In Duracell (India) Pvt. Ltd. v. CCE, New Delhi -III , one of such decisions noted by the referral Bench, a Division Bench at New Delhi did not agree with the view taken in Bullows Paint Equipment case and, after consulting New Oxford Dictionary of English and Justice T.P. Mukherjee's Law Lexicon for the meaning of the word 'issue' as verb, held that it was not correct to say that a Bill of Entry which was a specific duty -paying document prescribed under Sub -rule (3) of Rule 57G was not "issued". The Northern Bench also relied on the Larger Bench decision in Kusum Ingots and Alloys Ltd. v. CCE, Indore , to hold that the time -bar provision of Sub -rule (5) of Rule 57G was applicable to Modvat credit of duty paid on inputs as evidenced by any of the documents [including Bill of Entry] specified under Sub -rule (3) of Rule 57G. The decision in Duracell case was relied on in the case of Ashok Leyland Ltd. v. CCE, Chennai , another case noted by the referral Bench. The above Larger Bench decision of the Tribunal and the apex Court's decision in Osram Surya (P) Ltd. v. CCE, Indore were also relied on in Ashok Leyland case for holding that, after 29 -6 -1995 (the date on which the time -bar provision was first inserted in Rule 57G), it was not open to a manufacturer of final product to take Modvat credit on imported inputs beyond six months from the date of the prescribed document viz. relevant copy of Bill of Entry.