Customs, Excise and Gold Tribunal - Delhi
Commissioner Of Central Excise vs Shiv Shakti Tube Pvt. Ltd. on 19 November, 1996
Equivalent citations: 1997(90)ELT547(TRI-DEL)
ORDER G.R. Sharma, Member (T)
1. The short point for determination in this appeal is whether original invoices issued during the period 20-4-1994 to 4-5-1994 were valid documents for the purpose of taking Modvat credit. The Commissioner of Central Excise & Customs (Appeals) in his order dated 17-7-1996 modified the order of the Additional Collector to the extent that the credit of Rs. 65,400/- in respect of Invoice Nos. 26, 28 and 121, dated 20-4-1994, 21-4-1994 and 4-5-1994 is allowed.
2. The facts of the case are that the appellants are engaged in the manufacture of steel tubes and pipes. They are availing facility of Modvat credit under Rule 57A of the Central Excise Rules; that during the course of checking of the RT 12 returns relating to April and May, 1994 the departmental officers found that the respondents had taken credit amounting to Rs. 2,16,406.00 on the basis of 11 original copies of invoices issued under Rule 52A; that the department alleged that this credit was wrongly taken and therefore issued a show cause notice asking them to explain as to why Modvat credit of Rs. 2,16,406.00 should not be disallowed to them and why the amount should not be recovered from them under Rule 57-I and also why the penalty should not be imposed on them. After careful consideration of the submissions made the Additional Collector disallowed the credit of Rs. 65,400/- in respect of invoice Nos. 26,28 and 121, dated 20-4-1994,21-4-1994 and 4-5-1994. Against this order the respondents filed an appeal before the Commissioner (Appeals). The Commissioner (Appeals) decided the issue in favour of the respondents therefore the department has come up in appeal before me.
3. Shri Y.R. Kilanyia, ld. JDR for the appellant Commissioner submits that the respondents took Modvat credit on the strength of original invoices. He submits that as per Sub-rule 3 of Rule 52A of the Central Excise Rules duplicate copy of the invoice marked as "Duplicate for Transporter" is a valid document for taking credit under Rule 57G and Rule 57T of the Central Excise Rules, 1944; that credit can only be taken on the basis of duplicate copy of the invoice under Rule 52A; that credit cannot be taken on the basis of original copy of the invoice before issuing of Notification No. 23/94-C.E. (N.T.), dated 20-5-1994. He submits that this Notification is not applicable in this case as the credit was taken prior to 20-5-1994. He, therefore submits that Commissioner (Appeals) has wrongly allowed credit and therefore prays that the impugned order may be set aside.
4. Shri K.K. Anand, ld. Counsel appearing for the respondents submits that credit was taken during the period 20-4-1994 to 4-5-1994; that transporter copy (duplicate invoice) was lost and therefore the respondents took credit on the strength of original invoice. He submits that there is no dispute about the receipt of the goods; that the invoice clearly shows their name and address; that there was no provision for endorsement of invoice and therefore there was no possibility of transporter copy of the invoice to be misused by anyone else inasmuch as in the invoice the name of the respondents and address appeared. He submits that looking to these facts that Government of India issued Notification 23/94-C.E. (N.T.), dated 20-5-1994 clarifying that in case duplicate copy of the invoice is lost credit under the Modvat scheme can be taken on the strength of original invoice. He submits that in the case of Bharat Ispat -1996 (15) RLT 754 the Tribunal held that credit on the basis of original copy of the invoice in case of loss of duplicate copy can be allowed prior to introduction of the said Sub-rule on 20-5-1994 as the Sub-rule was clarificatory in the nature and therefore must have retrospective effect. He, therefore prays that the impugned order may be upheld and the appeal may be rejected.
5. Heard the submissions of both sides. I find that the issue in this case is limited one; that the respondents had taken credit on the strength of original invoice; that there is no dispute on the receipt of goods or their utilisation in the final product. I also observe that this was transitional period as the new system of taking credit on the strength of invoice was introduced with effect from 1-4-1994. I also observe that Government of India issued Notification 23/94-C.E. (N.T.), dated 20-5-1994 clarifying that Modvat credit could be taken on the strength of original invoice. I also find that this Tribunal in the case of Bharat Ispat held that "further the main object and purpose of these provisions is to ensure that Modvat credit is taken only in respect of duty-paid goods covered by the scheme and there is no misuse of the facility and that is why apart from prescribing various documents with reference to which benefit could be availed of and additional condition by way of satisfaction of the AC has been incorporated. Moreover even before this amendment, if the gate pass was lost in transit, it was open to the AC to make inquiries and satisfy himself before allowing the credit. What was earlier implied has now been made explicit by introducing Sub-rule 2(A). In these circumstances, Sub-rule 2(A) can only be considered as clarificatory in nature providing no procedure which could be deemed to have restrospective effect."
6. Having regard to the fact that the new system was introduced for the first time with effect from 1-4-1994 and that Notification 23/94-C.E. (N.T.) was issued on 20-5-1994 I agree with the finding of this Tribunal as reproduced above and hold that Notification 23/94-C.E. (N.T.) can be treated as clarificatory Notification and therefore further hold that the respondents had rightly taken Modvat credit on the strength of original invoice. In the result the impugned order is upheld and the appeal is rejected.