Customs, Excise and Gold Tribunal - Mumbai
Commissioner Of Central Excise vs Satyen Dye And Chemicals on 7 December, 1999
Equivalent citations: 2000(67)ECC643
ORDER J. N. Srinivasa Murthy, Member (J)
1. The department as the appellant has sought for the stay of the order-in-appeal of the Commissioner(Appeals), Cen. Excise & Customs, Vadodara dated 18.5.99, on the ground that the respondents, the manufacturer of SO Dyes, has taken Mod vat credit on the strength of the invoices which are not having pre-printed serial number and the word 'duplicate for transporter' as per Rule 52-A, 57-GG of the Central Excise Rules, 1944. The order-in-original has disallowed the Modvat credit of Rs. 82,112.50 on the above ground, after issuing the show cause notice and receiving the reply from the respondents and after hearing the respondents. The Commissioner (Appeals) has allowed the appeal preferred by the respondents on the ground that there is no allegation in the show cause notice that the goods were not received in the factory and utilised in the manufacture of the final product, and the said invoices are not genuinef which were not pre-printed as duplicate for transporter and it cannot be sufficient ground for denying Modvat credit. The contents of the invoice with important details are a substantial compliance with the provisions of law and the benefit cannot be denied for non-observance of the technical requirement, as the very purpose of the Modvat scheme would be defeated. The said order is not legal and correct as the invoices were not computerised and did not bear pre-printed serial number as required under Rule 52-A, 57-G and 57-GG and Notn. No. 2/95(NT) dated 19.1.95, according to which credit can be taken only on invoices which bear words 'duplicate for transporter', which were missing. The Modvat credit taken by the respondents is in violation of the said rules as the pre-printed Serial Numbers on Invoices is a pre-requisite for availment of modvat credit, which is stipulated in Rule 57GG(5) and it is not a procedural one but it goes to the root of modvat scheme. If the words 'duplicate for transporter' and pre-printed sl. numbers are not on the face of the invoices, there can be misuse of the modvat scheme.
2. I have perused the order-in-original, order-in-appeal, stay application and the judgments cited in the stay application, such as in the case of M/s. M.A. Prestressed Works v. CCE in the case of M/s Smruti Organics Ltd. v. CCE, Pune; in the case of Devidayal Aluminium Ind. Ltd. v CCE, Meerut and 1994 (71) ELT 917 (T) in the case of Lupin Lab. Ltd. v. CCE.
3. Heard the Ld. DR Shri for the applicant Commissioner. In spite of notice, the respondents had remained absent without any representation or any communication.
4. From the order-in-original it is seen that under the show cause notice, the demand was for Rs. 1,13,307.50 under Rule 57-1 of the Central Excise Rules read with Section. 11-A of the Central Excises Act. In the order-in-original, the credit was allowed only to the extent of Rs. 31,195 taken by the respondents and was disallowed to the extent of Rs. 82,112.50 on the ground that the invoices were not pre-printed with sl. numbers and the words 'duplicate for transporters' were also not preprinted thereon as required under Notn. No. 2/95 (NT) dated 19.1.95. It is only on invoice at sl.No. 28 of the Annexure to show cause notice 'duplicate' is printed vide computer on left hand bottom side of invoice . In the order-in-appeal, the Commissioner (Appeals) has observed that the respondents did not appear for hearing in response to the notice and so on perusal of the records, he has passed the order. He has held that failure of pre-printing as 'duplicate' for transporters cannot be adequate for denying modvat credit. The invoice contained all important details. Substantial compliance with the provisions of law is necessary and the respondents has substantially complied with law. Non-observance of technical requirement cannot be a ground for denying credit. The benefit of concession should not be denied to defeat the purpose of the modvat scheme. The judgment in the case of Smruti Organics Ltd. v. C. Ex.Pune had held that denial of credit due to lack of minor details in invoice like mode of transport is not justified, as it has no bearing on payment of duty or receipt of inputs and it can be subsequently supplied. In - Devidayal Aluminium Inds. Ltd. v. CCE, Meerut, it is held that invoice not re-endorsed with vehicle number by which goods re-transported to the factory gate from transporter's godown. There is no serious violation of law or rule., when there is no allegation in the show cause notice regarding misuse of the goods. Such goods received in the factory is not in dispute. Technical breach not to come in the ways of entitlement of modvat permissible . In 1994 (71) ELT 917 (T) - Lupin Laboratories Ltd. v. CCE, it has been held that in the modvat credit scheme substantial compliance is enough. Benefit is not deniable for non-observance of technical requirement.
5. From the above, it is seen that the impugned order has not dealt with the specific documents in setting aside the order-in-original under which there is a confirmation of duty demand. In in the case of M/s MA.Prestressed Works v. CCE , Jaipur II, the Tribunal has held that printed serial number on invoices is pre-requisite for availment of modvat credit which is stipulated under Sub-rule (5) of Rule 57GG, and it is not procedural error since it goes to very root of modvat scheme. The words 'duplicate for transport' and preprinted serial numbers are relevant for the above purpose. In view of this legal position, the impugned order, prima facie, cannot be held to be legal and proper one. The respondent has not controverted the contentions of the applicant. Hence, It is a fit case for grant of stay. So the stay application is allowed, and the impugned order is stayed, pending disposal of the appeal.