NIRMA LTD. Vs. CCE

JUDGEMENT

(1.) The appellants are engaged in the manufacture of Detergent Cakes, Detergent Powder, Toilet Soaps etc. and are availing benefit of Cenvat credit on inputs used in or in relation to the manufacture of their final products. Soda ash is one of their inputs. In the year 1998, the appellants imported 4750 MTs of soda ash through Mumbai port. Bill of Entry No. 1800 dated 25.6.98, which was filed for clearance of the goods for home consumption, was assessed provisionally by Mumbai Customs and accordingly the duties of Customs including CVD were paid on 17.7.98. The consignment was split into three parts, which were directly delivered from the dockyard to three factories of the appellant company, one at Mandali (Gujarat), another one at Kanpur (U.P.), and the third one at Pithampur (M.P.). In the Pithampur unit, Modvat credit of CVD of Rs. 17,43,596 on a quantity of 1584 MTs of soda ash was taken by the appellants on 22.8.98 on the basis of a certified copy of triplicate copy of the Bill of Entry. The department issued a show -cause notice to the party proposing to disallow the credit to them on the ground that attested photocopy of triplicate copy of Bill of Entry was not a prescribed document under Rule 57G of the Central Excise Rules, 1944 for the purpose of Modvat credit. The notice also proposed to impose penalty on the party. Another show -cause notice was also issued to the party for denying them Modvat credit of Rs. 1,64,585 which was taken on the strength of Certificate 'A' dated 5.4.99, issued under Rule 57E, of payment of differential amount of CVD upon finalisation of assessment of the Bill of Entry. In this connection, it was alleged that the credit taken on the basis of the certificate was not admissible as the claim for Modvat credit of CVD paid on provisional assessment itself was allegedly not admissible. The second show -cause notice also proposed to impose penalty on the party. The proposals in both the show -cause notices were contested. The original authority, which adjudicated the disputes, disallowed both the credits to the party and imposed on them a total penalty of Rs. 1,15,000. The appeal preferred to the Commissioner (Appeals) against the decision of the original authority did not succeed. Hence, the present appeal.

(2.) In the impugned order, Ld. Commissioner (Appeals) has disallowed the credit of Rs. 17,43,596 to the assessee on two grounds viz: (i) A certified photocopy of triplicate copy of Bill of Entry was not one of the specified documents under Rule 57G(2) for Modvat purpose; (ii) The assessee had not followed the procedure laid down in Board's Circular No. 96/7/95 -CX. Dated 13.2.95. In connection with the first ground, Ld. Commissioner has relied on the Tribunal's decision in CCE v. Shree Ram Switchgears Ltd., 2001 (131) ELT 116 (T). On the question of admissibility of the credit of Rs. 1,64,585, Ld. Commissioner (Appeals) has held that the Rule 57E certificate is not correctable to any of the documents prescribed under Rule 57G(2) and hence cannot be accepted for Modvat purpose.

(3.) Heard both sides. Ld Consultant challenged the finding that the credit of Rs. 17,43,596 was taken on the basis of a certified photocopy of triplicate copy of Bill of Entry. He submitted that the credit was actually taken on the basis of the original triplicate copy of Bill of Entry and not on the basis of any photocopy thereof. It was also argued that the Board's Circular dated 13.2.95 relied on in the impugned order was not applicable to the case. Ld. counsel submitted that it was not in dispute that the goods had suffered CVD and had been received in the factory and used in the manufacture of final product and, therefore, there was no justification for denying credit of the CVD to the assessee. The Bill of Entry was filed by the Head Office of the appellant company and the same was duly endorsed in favour of their factories at Mandali, Kanpur and Pithampur. The declarations filed with the Bill of Entry were also endorsed by the proper officer of Customs. Hence, Ld. Consultant argued, there was no reason whatsoever for denial of the credit to the assessee. Consultant relied on the Tribunal's decision in STS Chemicals Ltd. v. CCE, Pane, 1999 (111) ELT 870, Bhor Industries Ltd. v. CCE, Pune, 2000 (122) ELT 790 and ABS Industries Ltd. v. CC and CE, Vadodam, 2002 (51) RLT 755. Regarding the credit of Rs. 1,64,585, Ld. Consultant submitted that Rule 57E certificate itself was a specified document under Rule 57G for Modvat purpose and, therefore, the denial of the credit on .the ground that the certificate was not correctable to any specified document under the latter rule was illegal. It was further submitted that, as the assessee had correctly taken the credits, no penalty was liable to be imposed on them.