Archana Wadhwa, Member (J)
1. Two issues are involved in the present appeal. First is as to whether the appellants can take the modvat credit in respect of gate passes issued prior to 1.4.94 and the modvat credit was availed after 30th June, 1994. The second issue relates to the modvat credit availed on the" basis of documents described as gate passes issued after 1.4.94.
2. After hearing Shri S.P. Majumdar, Ld. Advocate and Shri A.K. Mondal, Ld. SDR, we find that the system of issuance of gate passes was replaced with the invoice system with effect from 1.4.94. However, the gate passes which were already issued by the input-manufacturer prior to 1.4.94 and were in the process of transit, were allowed to be utilised by 30.6.94 in terms of Notification 16/94-CE (NT) dated 30.3.94. The effect of the said Notification was that the input receiver was entitled to avail the modvat credit of duty paid on the inputs received by it under the cover of gate passes issued prior to 1.4.94 but the said facility was given only upto 30.6.94. The appellants' contention is that though they had received the input in their factory prior to 30.6.94 but the credit could not be availed by them inasmuch as the said documents in question were misplaced and could be located only after 30.6.94. They have contended that there is sufficient materials on record to show that the input materials in all the cases were received well before 30th June, 1994 and as such the condition of the Notification in question should be relaxed as a special case and by applying the doctrine of impossibility, the modvat credit should be allowed to them. The appellants have also relied upon the Larger Bench decision of the Tribunal in the case of CCEx., New Delhi v. Avis Electronics, 2000 (69) ECC 272 (LB): 2000 (37) RLT 501 (CEGAT-LE) wherein it has been held that loss of duty paying documents in transit includes loss in the office.
3. After considering the submissions made by the appellants, we find that the Notification No. 16/94-CE-(NT) dated 30.3.94 provides for availing the modvat credit on the basis of gate passes issued prior to 1.4.94. However, the said modvat credit can be availed only upto 30.6.94. Admittedly, the appellants have not availed the credit till the said date and the same has been availed subsequently. Whatever may be the reason for not availing the benefit upto 30.6.94, the fact remains that the condition of notification has not been fulfilled. The appellants' reliance on the Tribunal's decision in the case of Avis Electronics is not appropriated inasmuch as in that case the Tribunal dealt with the loss of duplicate copy of the invoice and availing the benefit on the basis of original copy of the invoice, which procedure is itself provided in the modvat rules. However, in the case of Notification No. 16/94, no situation providing taking of credit on the basis of gate passes after 30.6.94 in extraordinary situation has been provided for. Inasmuch as the said notification debarred taking of credit on the basis of GP I issued prior to 1.4.94, after 30th June, 1994, we are of the view that taking of credit by the appellants after 30th June, 1994 was not in accordance with the provisions, of the said Notification. Accordingly, demand of Rs. 80,99,779.00 confirmed on the said ground by the authorities below is upheld.
4. As regards the modvat credit of Rs. 9,75,248.00, we find that the same has been disallowed on the ground that the duty paying documents issued after 1.4.94 were named as gate passes by the" supplier of the inputs instead of describing the same as invoice. We find that the period involved is initial period of switch-over from the gate pass system to the invoice system. The appellants have relied upon the Board's Circular No. 76/76/94-CX dated 8.11.94 wherein any document issued by the manufacturer is a proper document for taking the credit as long as modvat credit is taken before 31.12.94. The said Circular was taken note by the Tribunal in the case of TISCO v. CCEx. Patna, 1998 (99) ELT 236 wherein it was held as under:
"4. I have carefully considered the pleas advanced from both sides. I am inclined to agree with the submission of the Ld. Advocate that the aforesaid Circular applies to any invoice or any documents as may be prescribed by the Central Board of Excise & Customs as valid documents under Rule 57G. The date of prescription by CBEC has not been given in the Circular. Therefore, there is no dispute that Gate Pass at one time or the other was a valid document, namely before 1.4.94. The Circular dated 8.11.94 of the CBEC of aforesaid is transitory provisions caused by introduction of new method i.e. invoices treated as valid duty paying documents. During the transitory period, some of the manufacturers not knowing the change in the method had been following the earlier practice. Keeping in view, the aforesaid purposes of the Circular dated 8.11.1994, there is no doubt that Gate Pass issued by a manufacturer though after 31.3.1994 would be valid duty paying document for the purposes of taking the modvat credit in terms of the said Circular. Accordingly, the appellants are entitled to the benefit of modvat credit. Consequently, after setting aside the impugned order, I allow the appeal with consequential relief to the appellant".
5. Inasmuch as the issue is covered by the earlier decision of the Tribunal, we see no reason to take a different view. Accordingly, we set aside the confirmation of demand of duty on this ground.
6. Appeal is partly allowed and partly rejected in the above terms.