UNION OF INDIA Vs. RAJASTHAN SPINNING AND WEAVING

JUDGEMENT

(1.) THIS is a reference application under Section 35H(1) of the Central Excise Act, 1944 (in short 'the Act of 1944') for directing the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi (in short 'CEGAT') to state the case and refer the following question of law said to be arising out of its order dated 14 -2 -2003.

(2.) THE facts giving rise to this application are that the respondent -assessee is engaged in the manufacture of Spun Yarn and is availing the benefit of Modvat credit in respect of inputs used by it in the manufacture of final product and during the period, with which this reference application concerns, it is availing the Modvat credit on certain inputs used by the respondent -assessee for its manufacture between 10th April, 1994 to 19th April, 1994. The respondent -assessee has not purchased the inputs directly from the manufacturer of those inputs namely; M/s. Terene Fibres India Ltd., but it purchased the inputs from M/s. Reliance Industries Ltd., Mumbai, which was the first purchaser of the goods from M/s. Terene Fibres India Ltd. The invoices in respect of goods in question were issued by M/s. Terene Fibres India Ltd., Thane to M/s. Reliance Industries Ltd., Mumbai against supply of five consignments of Polyester Staple Fibre. M/s. Reliance Industries Ltd. subsequently transferred the entire consignment covered by the said invoices to the respondent -assessee while the goods were in transit and before it reached the godowns of M/s. Reliance Industries Ltd., M/s. Reliance Industries Ltd. endorsed these invoices to the respondent -assessee. The invoices were endorsed by certifying that 'the entire consignment covered under this gate pass/invoice is endorsed to M/s. Rajasthan Spinning and Weaving Mills Ltd. Banswara'. M/s. Reliance Industries Ltd. also issued separate invoices in favour of buyer.

(3.) IT appears that in appeal by the assessee before the Commissioner (Appeals) when it was ultimately heard on merits, the only contention, between the assessee and the revenue urged before the Commissioner (Appeals), was that the assessee has availed the Modvat credit on the basis of invoices issued by the seller (RIL) without actually having received the excisable goods in its premises, as it was a case of transit sale.