CEA No.1 of 2004 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CEA No.1 of 2004 DATE OF DECISION: January 13, 2010 COMMISSIONER, CENTRAL EXCISE ...APPELLANT COMMISSIONERATE, JALANDHAR VERSUS M/S TWENTY FIRST CENTURY STEELS LTD. ...RESPONDENT MANDI GOBINDGARH CORAM: HON'BLE MR. JUSTICE ASHUTOSH MOHUNTA. HON'BLE MR. JUSTICE MEHINDER SINGH SULLAR. PRESENT: MR. GURPREET SINGH, SR. PANEL COUNSEL FOR THE APPELLANT. SH. JAGMOHAN BANSAL, ADVOCATE FOR THE RESPONDENT. ASHUTOSH MOHUNTA, J. The Revenue has filed this appeal challenging the order dated 5.8.2003, passed by the Customs, Excise & Service Tax Appellate Tribunal (for short 'the Tribunal') whereby it was held that a gate pass which has been endorsed thrice is an invalid document for the purpose of availing Modvat credit. The short question that arise in the present appeal is :- “Whether the GP-I endorsed more than twice are valid documents under Central Excise Rule 57-A(2) of erstwhile Central Excise Rules, 1944 in the light of Chandigarh Commissionerate Trade Notice No.42/89 dated 22.5.89.” The respondent M/s Twenty First Century Steels Ltd. availed CEA No.1 of 2004 -2- Modvat credit on the duty paid inputs on the strength of gate passes which have been endorsed thrice. The credit being availed by the respondent was allowed by the adjudicating authority vide order dated 13.2.1995 and the show cause notice issued to the respondent was dropped. The Revenue filed an appeal which was dismissed vide order Annexure P-2 by the Commissioner (Appeals), Central Excise. Against said order, the Revenue filed a further appeal before the Tribunal which has also been dismissed vide the impugned order (Annexure P-3). A perusal of the facts of the present case shows that the respondent had availed Modvat credit on the inputs on the strength of gate passes which had been endorsed three times. There is no dispute regarding receipt and utilization of the inputs and payment of duty on the inputs. The Commissioner (Appeals) relied on the decision of the Tribunal in SBS Organic Pvt. Ltd. Vs. CCE, reported as 1990(45) ELT 701. In SBS Organic's case (supra), it was held that relaxation made by the Board upto two endorsements on the gate passes was an administrative decision based on consideration of implementing the Modvat scheme. As long as the party is able to satisfy the authorities that Modvat credit being availed of by them on the basis of duty paid on the inputs, then there is no reason why the Modvat credit should not be allowed. No doubt, in the present case, gate passes had been endorsed thrice whereas, the procedural requirement is that it should be endorsed not more than two times, but in this case the respondent-Company had led sufficient evidence to show that it had availed of the Modvat credit for the inputs for which the duty has duly been paid, hence, the respondent has rightly been held entitled to claim the Modvat credit. CEA No.1 of 2004 -3- In view of the above, it is held that a party can claim Modvat credit even if there has been more than two endorsements on the gate passes, specially, when the duty has duly been paid on the inputs. Accordingly, as there is no infirmity in the order passed by the Tribunal, therefore, the present appeal is dismissed. The question referred to in this appeal is, therefore, answered against the Revenue and in favour of the assessee. (ASHUTOSH MOHUNTA) JUDGE January 13, 2010 (MEHINDER SINGH SULLAR) Gulati JUDGE