V.K. Agrawal, Member (T)

1. The issue involved in these appeals, filed by M/s. Rajasthan Synthetic Industries Ltd., is whether MODVAT Credit is available to them on the strength of gate passes endorsed thrice.

2. Shri P. Mullick, learned Advocate, submitted that the Deputy Commissioner, under the Order-in-Original No. 232-233/2000 dated 14.7.99, has allowed them MODVAT Credit of the duty paid on the inputs on the basis of gate passes endorsed thrice following the decision of the Tribunal in the case of S.B.B. Organics Pvt. Ltd. vs CCE, & C, 1990 (45) E.L.T. 701 (T); that, however, on appeals preferred by the Revenue, the Commissioner (Appeals) has set aside the Order-in-Original on the ground that the Board in circular No. 22/90-CX.8 dated 9.4.90 has clarified that the Tribnunals decision in S.B.S. Organics Pvt. case is in variance with the Boards instructions dated 17.4.89, which may be considered as an exception and would be made applicable to the individual case, if any, and it could not be applicable to any other case for grant of MODVAT Credit on the gate passes which have been endorsed more than two times; that the Commissioner (Appeals) has also observed, in the impugned order, that the Boards circulars are binding on revenue even it place the different interpretation than the interpretation put by the Honble Supreme Court as held in the case of CCE, Vadodara vs Dhiren Chemicals Industries, : 2002 (139) ELT 3 (SC). The learned Advocate, further, submitted that the Commissioner (Appeals) reliance on Boards circular is misplaced in as much as the Board does not have any authority/jurisdiction to undo a decision of the Tribunal by issuing classificatory instructions without filing any appeal against any of the Tribunals decisions. He relied upon the decision of the Delhi High Court in the case of M/s. Kisan Chemicals vs Union of india, : 1996 (88) ELT 648 (Del) wherein the Delhi High Court has held that the Board cannot merely issue a circular to render the decision of the Tribunal as irrelevant and nugatory. Learned Advocate finally mentioned that the appellate Tribunal in number of cases has held that the MODVAT Credit cannot be denied on the basis of gate passes endorsed thrice. He relied upon the decision of the Tribunal in the case of CCE, Calcutta-II vs M/s. Modern Malleables Ltd., : 1997 (92) ELT 284 (T) and CCE, Chandigarh vs Bilt rite Packaging P. Ltd., 2002 (50) RLT 933 (Cegat-Del.). Reliance has also been placed on the decision of the Tribunal in the case of CCE, Jaipur vs Sunrise Technofab Pvt. Ltd., : 1997 (90) ELT 468 (T) wherein the Tribunal rejected the Reference application for making reference to the High Court in case where MODVAT Credit was allowed on the strength of gate passes endorsed thrice holding that no law point is involved.

3. Countering the arguments Shri Virag Gupta, learned DR., reiterated the findings contained in the impugned order.

4. We have considered the submissions of both the sides.

5. The issue involved in the present appeals is no more res integra as the tribunal has settled this matter in the case of SBB Organics Pvt. Ltd., supra, holding that when the requirement of receiving the inputs accompanied with duty-paying documents created some difficulties in the case of small scale units to obtain inputs through intermediaries, the Board appears to have made Relaxation to this requirement by permitting one endorsement in the gate passes initially and subsequently based on the representations permitting up to two endorsements in the gate passes. This relaxation made by the Board appears to be purely of administrative nature based on considerations of implementing the MODVAT Scheme, so long as the duty paid nature of the goods and duty paid thereon could be established. The Tribunal, further, observed that it is evident from the Trade Notice that the government is keen to extend the MODVAT Credit so long as the goods in factory packed condition, as are covered by the gate passes, are received by the parties intending to avail MODVAT Credit. Going by this spirit of the relaxation, we are unable to appreciate the routine and mechanical approach of the authorities below in rejecting the claim of the MODVAT Credit only on the ground that more than one endorsement has been made. when the Boards themselves shave taken a decision to relax the procedural requirements by way of administrative instructions, it should be endeavor of the authorities to extend MODVAT Credit whereaver the duty-paid nature of the goods is evident from the gate passes produced and quantum of duty paid on the inputs could be as curtained from them". The learned Advocate has rightly pointed out that this decision of the Tribunal has been followed in large number of cases allowing the MODVAT Credit on the strength of gate passes undressed thrice. We also observe that this Tribunal in the case of CCE, Jaipur vs Sunrise Technofab Pvt. Ltd. has considered the effect of Circular No. 22/90-CX.8 dated 9.4.1990, which has been relied upon by the Commissioner (Appeals), and relying upon the Delhi High Court decision in the case of Kisan Chemicals, disregarded the circular as the circular canot render a decision of the Tribunal as as irrelevant. Accordingly, we find no merit in the impugned orders, which are set aside. we allow both the appeals.