1 IN IN IN THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORDINARY ORDINARY ORIGINAL ORIGINAL ORIGINAL CIVIL JURISDICTION CIVIL JURISDICTION CIVIL JURISDICTION CENTRAL CENTRAL CENTRAL EXCISE REFERENCE NO. 2 OF 1999 EXCISE REFERENCE NO. 2 OF 1999 EXCISE REFERENCE NO. 2 OF 1999 The The The Simplex Mills Co.Ltd Simplex Mills Co.Ltd Simplex Mills Co.Ltd ...... Applicant Applicant Applicant vs vs vs CCE, CCE, CCE, Mumbai-IV Mumbai-IV Mumbai-IV ...... Respondent Respondent Respondent Mr.M.H.Patil Mr.M.H.Patil Mr.M.H.Patil a/w a/w a/w Ms.Aparna Hirandagi for Applicant Ms.Aparna Hirandagi for Applicant Ms.Aparna Hirandagi for Applicant Mr.A.S.Rao Mr.A.S.Rao Mr.A.S.Rao with Mr.Parag Vyas for with Mr.Parag Vyas for with Mr.Parag Vyas for Respondent Respondent Respondent CORAM CORAM CORAM : S.RADHAKRISHNAN & : S.RADHAKRISHNAN & : S.RADHAKRISHNAN & V.C.DAGA, V.C.DAGA, V.C.DAGA, JJ JJ JJ DATE DATE DATE : : : 7th June, 2007 7th June, 2007 7th June, 2007 P.C. P.C. P.C. 1.1.1. Heard learned counsel for the applicant and Heard learned counsel for the applicant and Heard learned counsel for the applicant and respondent. respondent. respondent. 2.2.2. In the above, following three substantial In the above, following three substantial In the above, following three substantial questions questions questions of law have been referred to this Court of law have been referred to this Court of law have been referred to this Court by by by way of reference : way of reference : way of reference : " 1. Whether invoice issued under Rule 52A 1. Whether invoice issued under Rule 52A 1. Whether invoice issued under Rule 52A of of of CER by a Manufacturer and endorsed in CER by a Manufacturer and endorsed in CER by a Manufacturer and endorsed in favour favour favour of Modvat availer is valid under of Modvat availer is valid under of Modvat availer is valid under first first first proviso to Rule 57 G (2) of CER after proviso to Rule 57 G (2) of CER after proviso to Rule 57 G (2) of CER after 1-4-1994 1-4-1994 1-4-1994 ; ; ; 2.2.2. Whether invoice issued by a Dealer who Whether invoice issued by a Dealer who Whether invoice issued by a Dealer who has has has bought the inputs from a bought the inputs from a bought the inputs from a manufacturer/dealer manufacturer/dealer manufacturer/dealer who got the inputs who got the inputs who got the inputs manufactured manufactured manufactured ut of his own raw materials ut of his own raw materials ut of his own raw materials could could could be considersed as valid for modvat be considersed as valid for modvat be considersed as valid for modvat purpose purpose purpose under Notn.No. 15/94-CE (NT) dated under Notn.No. 15/94-CE (NT) dated under Notn.No. 15/94-CE (NT) dated 30-3-1994. 30-3-1994. 30-3-1994. 3.3.3. Whether Whether Whether deficiency in duty paying deficiency in duty paying deficiency in duty paying documents documents documents can be the sole ground for denial can be the sole ground for denial can be the sole ground for denial of of of substantial benefit of credit of Modvat." substantial benefit of credit of Modvat." substantial benefit of credit of Modvat." 2 3.3.3. All the above three questions of law are All the above three questions of law are All the above three questions of law are interconnected interconnected interconnected and involves interpretation of and involves interpretation of and involves interpretation of section section section 57 G of Central Excise Rules. Learned 57 G of Central Excise Rules. Learned 57 G of Central Excise Rules. Learned counsel counsel counsel for the respondent pointed out that the for the respondent pointed out that the for the respondent pointed out that the issue issue issue is squarely covered by our judgment in is squarely covered by our judgment in is squarely covered by our judgment in Marmagoa Marmagoa Marmagoa Steel Ltd vs Union of India 2005 (192) Steel Ltd vs Union of India 2005 (192) Steel Ltd vs Union of India 2005 (192) E.L.T.82 E.L.T.82 E.L.T.82 (Bom) wherein learned counsel strongly (Bom) wherein learned counsel strongly (Bom) wherein learned counsel strongly relied relied relied on para 10 of the said judgment which reads on para 10 of the said judgment which reads on para 10 of the said judgment which reads as as as under : under : under : ."."." For availing the credit of duty, what is For availing the credit of duty, what is For availing the credit of duty, what is required required required to be established under Rule 57 G to be established under Rule 57 G to be established under Rule 57 G isisis that that that the inputs received are in fact duty the inputs received are in fact duty the inputs received are in fact duty paid. paid. paid. The procedure set out in Rule 57G of The procedure set out in Rule 57G of The procedure set out in Rule 57G of the the the Central Excise Rules is to ensure that Central Excise Rules is to ensure that Central Excise Rules is to ensure that the the the credit is taken on the basis of duty credit is taken on the basis of duty credit is taken on the basis of duty paid paid paid documents. The bill of entry is one documents. The bill of entry is one documents. The bill of entry is one such such such document set out in Re 57G. The said document set out in Re 57G. The said document set out in Re 57G. The said rule rule rule does not require that the bill of entry does not require that the bill of entry does not require that the bill of entry should should should be be be in the name of the person claiming in the name of the person claiming in the name of the person claiming credit credit credit of duty. It is not in dispute that of duty. It is not in dispute that of duty. It is not in dispute that the the the goods goods goods imported and cleared on payment of imported and cleared on payment of imported and cleared on payment of duty duty duty by by by one person can be used as inputs and one person can be used as inputs and one person can be used as inputs and credit credit credit of duty can be claimed by another of duty can be claimed by another of duty can be claimed by another person person person by establishing that the imported by establishing that the imported by establishing that the imported duty duty duty paid paid paid goods have been received as inputs goods have been received as inputs goods have been received as inputs and and and that the importer has not taken credit that the importer has not taken credit that the importer has not taken credit of of of that duty. In the present, it is that duty. In the present, it is that duty. In the present, it is established established established that the duty paid goods are that the duty paid goods are that the duty paid goods are received received received as inputs. However, the credit is as inputs. However, the credit is as inputs. However, the credit is denied denied denied on the ground that the Bill of entry on the ground that the Bill of entry on the ground that the Bill of entry isisis not endorsed in the name of the not endorsed in the name of the not endorsed in the name of the appellant. appellant. appellant. Rule 57G does not require that Rule 57G does not require that Rule 57G does not require that for for for taking credit of duty, the bill of entry taking credit of duty, the bill of entry taking credit of duty, the bill of entry should should should be endorsed in the name of the be endorsed in the name of the be endorsed in the name of the claimant. claimant. claimant. Counsel for the revenue could Counsel for the revenue could Counsel for the revenue could point point point out any provision of law in the Actr out any provision of law in the Actr out any provision of law in the Actr or or or the Rules regarding the endorsement on the Rules regarding the endorsement on the Rules regarding the endorsement on the the the bill of entry. In the absence of any bill of entry. In the absence of any bill of entry. In the absence of any provision provision provision regarding endorsement on the bill regarding endorsement on the bill regarding endorsement on the bill of of of entry, the credit of duty cannot be entry, the credit of duty cannot be entry, the credit of duty cannot be denied denied denied on the ground that the bill of entry on the ground that the bill of entry on the ground that the bill of entry isisis not not not endorsed in the name of the claimant. endorsed in the name of the claimant. endorsed in the name of the claimant. As As As stated hereinabove, what is required to stated hereinabove, what is required to stated hereinabove, what is required to be be be established for taking credit of duty is established for taking credit of duty is established for taking credit of duty is that that that the goods used as inputs are duty paid the goods used as inputs are duty paid the goods used as inputs are duty paid and and and that that that the credit of duty paid on the said the credit of duty paid on the said the credit of duty paid on the said goods goods goods has not been taken. In the facts of has not been taken. In the facts of has not been taken. In the facts of 3 the the the present case, the evidence on record present case, the evidence on record present case, the evidence on record i.e. i.e. i.e. bills of entry together with the bills of entry together with the bills of entry together with the certificates certificates certificates issued issued issued by excise authorities at by excise authorities at by excise authorities at Surat Surat Surat and Goa, clearly show that the goods and Goa, clearly show that the goods and Goa, clearly show that the goods imported imported imported and cleared under the bills of and cleared under the bills of and cleared under the bills of entry entry entry on payment of duty were received and on payment of duty were received and on payment of duty were received and utilised utilised utilised by the appellant as inputs inits by the appellant as inputs inits by the appellant as inputs inits factory factory factory and that the importer has not and that the importer has not and that the importer has not utilised utilised utilised the the the credit of duty paid on the said credit of duty paid on the said credit of duty paid on the said goods. goods. goods. Thus, the appellant has established Thus, the appellant has established Thus, the appellant has established that that that the inputs received under the bills of the inputs received under the bills of the inputs received under the bills of entry entry entry were duty paid and therefore, the were duty paid and therefore, the were duty paid and therefore, the authorities authorities authorities below were not justified in below were not justified in below were not justified in denying denying denying the credit of duty to the appellant. the credit of duty to the appellant. the credit of duty to the appellant. The The The two decisions relied upno by the two decisions relied upno by the two decisions relied upno by the Tribunal Tribunal Tribunal do not support the case of the do not support the case of the do not support the case of the revenue. revenue. revenue. In the case of Balmer Lawrie & Co In the case of Balmer Lawrie & Co In the case of Balmer Lawrie & Co (supra) (supra) (supra) the issue was not relating to the the issue was not relating to the the issue was not relating to the endorsement endorsement endorsement on the bills of entry and, on the bills of entry and, on the bills of entry and, therefore, therefore, therefore, the said decision is the said decision is the said decision is distinguishable distinguishable distinguishable on facts. Similarly, the on facts. Similarly, the on facts. Similarly, the decision decision decision of of of the Tribunal in the case of Tata the Tribunal in the case of Tata the Tribunal in the case of Tata Iron Iron Iron and Steel Co.Ltd (supra) is also and Steel Co.Ltd (supra) is also and Steel Co.Ltd (supra) is also distinguishable distinguishable distinguishable on facts as the said on facts as the said on facts as the said decision decision decision is based on erroneous concession is based on erroneous concession is based on erroneous concession made made made by the counsel for the appellant by the counsel for the appellant by the counsel for the appellant therein therein therein that in the case of Balmer Lawrie & that in the case of Balmer Lawrie & that in the case of Balmer Lawrie & Co Co Co it is held that the Modvat credit is not it is held that the Modvat credit is not it is held that the Modvat credit is not available available available on on on the basis of endorsed copies of the basis of endorsed copies of the basis of endorsed copies of bills bills bills of entry. " of entry. " of entry. " Under Under Under the facts and circumstances, in view of the facts and circumstances, in view of the facts and circumstances, in view of the the the aforesaid interpretion of the Division Bench, aforesaid interpretion of the Division Bench, aforesaid interpretion of the Division Bench, questions questions questions are answered in favour of the assessee are answered in favour of the assessee are answered in favour of the assessee and and and against the revenue. against the revenue. against the revenue. 4.4.4. Reference stands disposed of accordingly. Reference stands disposed of accordingly. Reference stands disposed of accordingly. (V.C.Daga, (V.C.Daga, (V.C.Daga, J) J) J) (Dr.S.Radhakrishnan, (Dr.S.Radhakrishnan, (Dr.S.Radhakrishnan, J) J) J) 4