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2008 Supreme(SC) 2099
SUPREME COURT OF INDIA
S.H. KAPADIA, B. SUDERSHAN REDDY, JJ.
Union of India and others - Appellants
Versus
Marmagoa Steel Limited - Respondent
Civil Appeal No. 4902 of 2008, Arising out of SLP (C) No. 15901 of 2006 : (2005) 192 ELT 82 (Bom).
Decided on : 31-07-2008
For the Appellant :V. Shekhar, Senior Advocate (Vikram Gulati and B. Krishna Prasad, Advocates).
For the Respondent:S.K. Bagaria, Senior Advocate (Ms. Rohina Nath and Umesh Kr. Khaitan, Advocates).
Headnote:
Provisions of Central Excise Act - Central Excise Rules - Rules 52-A and 57-G - Consignment - Delivery challan - Show-cause notice was issued to assessee on ground that it had taken credit of duty on basis of only delivery challan issued by M/s. Essar Steel a division of Gujarat Limited - According to Department MODVAT credit could not have been taken under Rule 57-G of Central Excise Rules merely on basis of delivery challans - Show-cause notice assessee was called upon to show cause as to why action should not be taken for wrongly availing MODVAT credit on basis of delivery challans and in that connection Department placed reliance on Rule 57-G of said Rules - Allegation made by Department was denied - Assessee submitted that they had taken credit of duty in accordance with provisions of Central Excise Act and Rules framed thereunder - Suffice it to state that Commissioner of Customs Goa confirmed demand and levied penalty - Aggrieved by said order assessee preferred an appeal before Tribunal - By its order Tribunal confirmed duty but reduced penalty/set aside portion thereof - Held, 52-A Goods to be delivered on an invoice.? No excisable goods shall be delivered from a factory or a warehouse except under an invoice signed by owner of factory or his authorised agent - 57-G Procedure to be observed by manufacturer? Every manufacturer intending to take credit of duty paid on inputs under Rule 57-A shall file a declaration with Assistant Collector of Central Excise having jurisdiction over his factory indicating description of final products manufactured in his factory and inputs intended to be used in each of said final products and such other information as said Assistant Collector may require and obtain a acknowledgement of said declaration Rule 52-A shows that no excisable goods shall be delivered from a factory or a warehouse except under an invoice signed by owner of factory or his authorised agent - Rule 52-A therefore applies to a situation where goods are cleared from a factory or a warehouse to place of assessee - For such a situation proviso in Rule 57-G stipulates that no credit shall be taken unless inputs are received in factory under cover of an invoice issued under Rule 52-A - Court come to third bill of entry only above certificate at of paper book was relied upon and triplicate copy of bill of entry was not produced - In Court view respondent had wrongly availed of MODVAT credit of on quantity of scrap referred to in above chart - Appeal Allowed
ORDER :
S.H. Kapadia, J.
Leave granted. In November 1994 M/s. Essar Gujarat Limited imported three consignments, in all, amounting to 4426.796 MT of shredded scrap and cleared the same under three bills of entry on payment of duty. Out of the said 4426.796 MT M/s. Essar Gujarat Limited gave a loan of 3314.159 MT of scrap to the respondent herein. On receipt of the said goods the respondent took credit of Rs. 27,83,198 (Rupees twenty-seven lakhs, eighty-three thousand and one hundred ninety-eight only) for the countervailing duty paid by M/s. Essar Gujarat Limited on 3314.159 MT of scrap.
2. For the sake of convenience we annexe hereinbelow the details of quantities imported by M/s. Essar Gujarat Limited and supplied to the respondent herein.
Bill of entry Number and date Quantity covered by bill of entry Amount of countervailing duty paid Quantity supplied to the respondent MODVAT credit taken by the respondent
F-84/94-95 dated 30-5-1994 1450.000 MT Rs. 12,17,696 1450.000 MT Rs. 12,17,696
F-90/94-95 dated 31-5-1994 1651.500 MT Rs. 13,86,914 1651.500 MT Rs 13,86,914
F-93/94-95 dated 6-6-1994 1325.296 MT 212.659 MT Rs 1,78,588
4426.796 MT 3314.159 MT Rs. 27,83,198
3. On 23-11-1995, a show-cause notice was issued to the assessee on the ground that it had taken credit of duty on the basis of only delivery challan issued by M/s. Essar Steel, a division of M/s. Essar Gujarat Limited. According to the Department, MODVAT credit could not have been taken under Rule 57-G of the Central Excise Rules merely on the basis of delivery challans.
4. By the said show-cause notice the assessee was called upon to show cause as to why action should not be taken for wrongly availing MODVAT credit on the basis of delivery challans and in that connection the Department placed reliance on Rule 57-G of the said Rules. The allegation made by the Department was denied. The assessee submitted that they had taken credit of duty in accordance with the provisions of the Central Excise Act and the Rules framed thereunder.
5. Suffice it to state that the Commissioner of Customs, Goa confirmed the demand and levied penalty. Aggrieved by the said order dated 26-9-1997, the assessee preferred an appeal before the Tribunal. By its order dated 11-8-2004 the Tribunal confirmed the duty but reduced the penalty/set aside the portion thereof.
6. The assessee preferred Central Excise Appeal No. 117 of 2004 in the Bombay High Court. The appeal stood allowed. Hence, this civil appeal is filed by the Department.
7. As can be seen from the chart quoted hereinabove, the total consignment of 4426.796 MT shredded scrap stood imported by M/s. Essar Gujarat Limited under three distinct bills of entry dated 30-5-1994, 31-5-1994 and 6-6-1994. As regards the bill of entry dated 6-6-1994 it may be mentioned that the bill of entry indicating payment of duty by the importer on the quantity, namely, 1325.296 MT was not produced. Only a certificate at p. 42 of the paper book, as issued by the Superintendent, Central Excise, Surat to the Superintendent, Central Excise, Goa came to be produced before the adjudicating authority.
8. At this stage we may quote the provisions of Rule 52-A and Rule 57-G:
"52-A. Goods to be delivered on an invoice.?(1) No excisable goods shall be delivered from a factory or a warehouse except under an invoice signed by the owner of the factory, or his authorised agent.
57-G. Procedure to be observed by the manufacturer.?(1) Every manufacturer intending to take credit of the duty paid on inputs under Rule 57-A, shall file a declaration with the Assistant Collector of Central Excise having jurisdiction over his factory, indicating the description of the final products manufactured in his factory and the inputs intended to be used in each of the said final products and such other information as the said Assistant Collector may require, and obtain a dated acknowledgement of the said declaration.
(2) A manufacturer who has filed a declaration under sub-rule (1) may, after obtaini
