CCE Vs. PUNJAB CONCAST

JUDGEMENT

(1.) Revenue has filed this appeal being aggrieved by the impugned order passed by the Commissioner (Appeals). The learned Commissioner (Appeals) in the impugned order had held - -

(2.) Facts of the case briefly stated are that the respondents herein are engaged in the manufacture of iron and steel products. They are availing Modvat credit in terms of Rule 57A and 570 of the Central Excise Rules, 1944 in respect of duty paid on inputs and capital goods. It was alleged that the respondents had taken Modvat credit amounting to Rs. 19,84,069.64 on the inputs i.e. melting scrap for utilizing the same in the payment of Central Excise duty on the finished products. The respondents herein imported melting scrap. It was alleged that they wrongly availed Modvat credit on the strength of Bill of Entry after expiry of six months. A show -cause notice was accordingly issued to the respondents herein asking them to explain as to why Modvat credit should not be disallowed and why penalty should not be imposed. In reply to the show -cause notice the respondents herein submitted that Rule 57G provided that the manufacturer shall not take credit after six months of the date of issue of any of the documents specified in the first proviso to this sub -rule. It was submitted by them that Sub -rule (5) of Rule 57G provides that credit shall also not be taken by the manufacturer after six months of the date of issue of any documents specified in Sub -rule (3) and where the intermediate products manufactured by the user of inputs specified under Rule 57A are received by the manufacturer after 9 months. It was submitted by them that Trade Notice No. 5 -CE/97 dated 20.1.1997 issued by Chandigarh Commissionerate cannot override the provisions of Rule. It was, therefore, submitted by them that Modvat credit was correctly taken. Deputy Commissioner disallowed Modvat credit and imposed a penalty.

(3.) Arguing the case for Revenue Shri Mewa Singh, learned SDR submits that learned Commissioner (Appeals) has erred in allowing the Modvat credit availed by the respondents herein after expiry of six months from the date of payment of duty on Bills of Entry; that Trade Notice No. 5 -CE/97 dated 20.1.97 which clarified that the period of six months for the purpose of taking Modvat credit in the case of imported goods shall be computed from the date of payment of duty and not from the date of issue of Bill of Entry, was issued for the convenience of the Trade which was based on the Circular No. 275/109/96 -CX dated 26.11.96 that the Apex Court in the case of Paper Products Ltd. v. CCE, 1999 (66) ECC 36 (SC) : 7999 (112) ELT 765 held that Circular issued by the Department is binding on the Department Authorities; that the Tribunal in its Final Order Nos. 104 - -107/2000 dated 24.3.2000 in the case of M/s. Oswal Woollen Mills, Ludhiana held that Trade Notices are binding on the departmental authorities; that Rule 57G (5) of the Central Excise Rules, 1944 envisages that Modvat credit can be availed inter alia on Bill of Entry within six months from the date of issue and thus to hold that limitation of six months for taking credit is not applicable in the case of Bill of Entry is bad in law and against the spirit of the statute. He, therefore, prayed that the appeal may by allowed.