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Cce Meerut v. S. Pharma Cer. Ghaziabad - CENTRAL EXCISE REFERENCE No. 32 of 2000 [2007] RD-AH 7073 (18 April 2007)


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Court No. 2

Central Excise Reference No. 32.2000

Commisisoner of Central Excise, Meerut


M/s Sadhna Pharmaceuticals

Hon'ble R.K.Agrawal, J.

Hon'ble Bharati Sapru, J.

The Customs, Excise & Gold (Control) Appellate Tribunal, New Delhi has referred the following two questions of law for opinion of this Court.

"Whether gate pass carrying endorsement is a valid document or not specially when it has more than two endorsements?

After 1.4.94, the Government prescribed invoi8ces as duty paying documents. Before 1.4.94, G.P.I. was the duty payment documents. There were cases in which the goods cleared under the G.P.I were sold under the G.P.Is were endorsed on or after 1.4.94. Entry 10 in Notification No. 16/94 dated 30.3.94 prescribed the documents on the basis of which Modvat credit can be taken. According to this Notification, the documents prescribed in the table would be recognized for the purpose of availment of Modvat credit provided that the documents have been issued before 1.4.94 and the credit has been taken on or before 30.6.94. Therefore, the question of law that arises is whether a gate pass issued prior to 1.4.94 and endorsed on or after 1.4.94 on the basis of which Modvat credit was taken on or before was a valid document or not?"

Briefly stated the facts giving rise to the present reference are as follows:

M/s Sadhna Pharmaceuticals are engaged in the manufactur of P.P. Medicines falling under sub-heading 3003.10. They were availing Modvat credit on certain items on the basis of endorsed gate passes. The Department alleged that the availment of Modvat credit on the strength of gate passes on which there were three endorsements, was wrong and accordingly issued a SCN to the assessee asking them to explain as to why Moevat credit on the strength of endorsed gate passes should not be denied to them. The Department disallowed Modvat credit to the assessee. The assessee filed an appeal before the Tribunal and the Tribunal after following the decision in the case of Moosa Haji Patrawala and Chaphekar Engineering (P) Ltd. reported in 1996 (64) ECR 58 held that Modvat credit was admissible.

We have heard Sri K.C.Sinha, learned Assistant Solicitor General of India appearing for the Revenue. Nobody has appeared for the respondent assessee. We are proceeding to decide the present Reference on the basis of the record available before us and on the basis of the arguments advanced by Sri K.C.Sinha.

We find that in the Notification No. 16/94-CE(NT) dated 30.3.94 documents have been prescribed by the Central Government in exercise of powers conferred by Rule 57G of the Central Excise Rules, 1944. The said notification also provides that the Modvat credit on the basis of the documents mentioned in column (3) of the Table annexed to the notification can be availed of provided the documents have been issued before the 1st April, 1994 and the credit under the said rule has been taken on or before the 30th June, 1994. At sl. No. 10 of column (3) the document specified is endorsed gate passes/subsidiary gate passes/certificates. Admittedly in the present case the respondent has taken Modvat credit on the basis of  endorsed gate passes which were issued prior to 1st April, 1994 and the Modvat credit has been availed of on or before 30th June, 1994, thus, the Tribunal has rightly allowed Modvat credit on the basis of endorsed gate passes.  

We do not find any illegally in the order of the Tribunal and accordingly, answer the question referred to us in the affirmative i.e. in favour of the assessee and against the Revenue. There will be no order as to costs.




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