Customs, Excise and Gold Tribunal - Delhi
M/S. Boc India Ltd. vs Cce New Delhi on 22 January, 1999
ORDER
P.S.Bajaj, Member(J)
1. This appeal has been filed by the appellants against the order in appeal dated 8.12.99 vide which the Commissioner(Appeals) had affirmed the order in original dated 25.1.97 of the Additional Commissioner disallowing modvat credit of Rs.1,70,460.30 to the appellants.
2. The facts giving rise to this appeal may briefly be stated as under:
3. The appellants are engaged in the manufacture of oxygen gas, dissolved acetylene dry nitrogen etc. They availed modvat credit of Rs.2,90,350.77 on the basis of original invoices other than the transporter's copy, but the same was inadmissible as per amendment of Rule 57-G (20 vide Notification No.23/94-CE(NT) dated 20.5.94. They were accordingly issued show cause notice dated 27.9.94 vide which recovery of modvat credit amounts under Rule 57-I of the Central Excise Rules was proposed to be made from them. However, that show cause notice was later on, amended by issuing corrigendum dated 26.2.96 wherein the amount recoverable was corrected to Rs.2,86,772.77 instead of Rs.2,90,350.77. In reply to that show cause notice the appellants, however, pleaded that they had already submitted application through letter dated 27.7.94 for permission in terms of Rule 57-G (2A) to avail modvat credit on the basis of the invoices dated 25.5.94, 16.5.94, 27.5.94 and 14.5.94 of Rs.70,077.48. Regarding other invoices vide which the modvat credit of Rs.122743.10 was availed, they submitted that invoice copies marked with 'Duplicate from Transporter' had been produced before the Superintendent and earlier they were misplaced and for that reason could not be produced. They, however, admitted that on the basis of these 'Transporters' copies the modvat credit was claimed but was not claimed on the original. Similarly regarding the remaining invoices on the strength of which they took modvat credit of Rs.88622.82 they alleged that the 'Duplicate Transporters' copies were lost in transit and for that reason modvat credit on the basis that reason modvat credit on the basis of original invoices had been taken. The Additional Commissioner after hearing the appellants confirmed the demand of 1,70,460/- and dropped the demand for remaining amount of Rs.116312/- against the appellants through the order in original. His order had been affirmed by the Commissioner (Appeals) through the impugned order.
4. I have heard both the sides and gone through the record.
5. The learned counsel for the appellants has contended that under sub-rule (2A) of Rule 57-G modvat credit had been made permissible on the original invoices, therefore, the appellants were within their right to avail the same on the original invoices for having lost the transporter's copies. He has further submitted that in respect of invoices dated 22.5.94, 16.5.94 27.5.94 and 14.5.94 vide which modvat credit of Rs.70,077.48 was taken an application was also given seeking permission to take the modvat credit on the original invoices and that sub-rule (2A) of Rule 57-G of the Rules is retrospective in operation and as such the modvat credit could not be disallowed to the appellants. Therefore, the impugned order of the Commissioner (Appeals) deserves to be set aside.
6. On the other hand, the learned JDR has refuted this contention of the counsel and maintained that for having failed to satisfy the adjudicating authority regarding the loss of the original and even to intimate as about the loss, the modvat credit of the disputed amount had been rightly denied to the appellants.
7. It has not been disputed before me that modvat credit under the Rules was permissible only on those copies of invoices which carried the words "transporter's copy". No intimation regarding the loss of the competent authority. The modvat credit on the basis of these 4 invoices dated 22.5.94, 16.5.94, 27.594 and 14.5.94 of Rs.70,077/48 was taken by them in May 1994 whereas application for permission to take modvat credit on originals was given in July 1994. They failed to convince the competent authority regarding the loss of the transporter's copies of the invoices and the delay in moving the application. Regarding the other original invoices on which the modvat credit had been disallowed to the appellants, they neither sent any about regarding the loss of the transporter's copies nor sought any permission under sub-rule (2A) of Rule 57-G of the Rules for taking modvat credit on those invoices. Therefore, the modvat credit of the disputed amount on the strength of the invoices in question had been rightly disallowed to appellants.
8. The argument of the learned counsel that sub-rule (2A) of Rule 57-G of the Rules has got retrospective effect and the appellants were entitled to its benefit, is wholly misconceived and cannot be accepted. Sub rule (2A) was admittedly inserted in Rule 57-G of the Rules vide Notification No.23/94-CE(NT) dated 20.5.94. Through this sub-rule the manufacturer had been permitted to take modvat credit on the inputs received in the factory on the basis of original invoices if the duplicate of the invoices was lost in transit subject to the satisfaction of the Assistant Commissioner. Earlier to that no such provision existed in rule 57-G. This sub-rule conferred power on the Assistant Commissioner if he was satisfied about the loss of the duplicate copies to allow modvat credit to the manufacturer on the original invoices. This sub-rule, therefore, cannot be said to be clarificatory in nature as it did not clarify any existing provision regarding the power of the Assistant Commissioner to allow the modvat credit on the original invoices to the manufacturer if he was satisfied about the loss of the duplicate copies. No procedure already in-built in Rule 57-G of the Rules in this regard can be said to have been clarified by inserting this sub-rule (2A) therein. This sub-rule, as observed above, bestowed power on the Assistant Commissioner to allow credit on the original invoices to the manufacturer, if he was satisfied with the loss of the original copies, for the first time, as earlier such a power did not vest in him under Rule 57-G of the Rules. Therefore, this sub-rule cannot be said to had retrospective effect. It can have only prospective effect from the date on which it was inserted in Rule 57-G of the Rules through Notification No.23/94-CE dated 20.5.94.
9. All the original invoices relied upon by the appellants pertain to the period prior to 20.5.94 and as such no benefit of this sub-rule (2A) could be claimed by them for taking modvat credit on the basis of the original invoices. Moreover, no cogent evidence to prove the loss of the duplicate copy of the invoices, was placed on record by them to satisfaction of the competent authority. No intimation even about the loss of the duplicate copies of invoices, was given by them to the concerned officer. Even regarding those 4 invoices the application was moved only in July 1994 while the modvat credit was moved only in July 1994 while the modvat credit was availed in May 1994 and that too without any cogent proof of loss of the duplicate copies of the invoices.
10. The ratio of the law laid down in CCE Jaipur Vs. Shive Shakti Pvt. Ltd. 1997(90) ELT 547 (Tribunal) and Trishul Alloys Pvt. Ltd. vs. CCE Calcutta-II 1997(920 ELT 249 (Tribunal) referred by the learned counsel cannot be made applicable to the facts of the present cases. In both those case it had been, no doubt, observed by the cases it had been, no doubt, observed by the Tribunal that modvat credit could be taken on the strength of original invoices when duplicate (transporter's copy) was lost in view of Notification No.23/94-CE(NT) and sub-rule (2A) was clarifactory in nature, and had retrospective effect. But as observed above, no provision of sub-rule (2A) of Rule 57-G of the Rules cannot be said to be clarificatory at all as through this sub-rule no clarification of the already existing law regarding taking of the modvat credit on original invoices existed. Through this sub-rule (2A) of Rule 57-G for the first time power had been conferred on the Assistant Commissioner to allow the modvat credit to the manufacturer on the original invoices when he was satisfied about the loss of the duplicate copies as earlier to that no such power had been vested with him. Moreover, in the instant case, as observed above, the appellants have failed to prove the loss of duplicate copies of the invoices. Therefore, the modvat credit had been rightly disallowed to them on the original invoices.
11. In view of the discussion made above, there is no merit in the appeal filed by the appellants and the same is ordered to be dismissed.