Customs, Excise and Gold Tribunal - Tamil Nadu
Bhoruka Textiles Ltd. vs Commissioner Of C. Ex. on 7 July, 1999
Equivalent citations: 2000(116)ELT583(TRI-CHENNAI)
ORDER V.K. Ashtana, Member (T)
1. This is an appeal against the Order-in-Appeal No. 161/97, dated 2-9-1997, wherein the learned Commissioner (Appeals) has upheld the Order-in-Original No. 43/95, dated 8-12-1995 passed by the Assistant Commissioner of Central Excise. The issue concerns the following :-
(a) The denial of Modvat credit on a shortage of 261 litres of spindle oil out of the total quantity of 4200 litres on which duty has been paid as per the invoices. The less quantity has been accounted for in RG 23A Part-I and therefore, the department has disallowed the credit of Rs. 385/- on this shortage.
(b) Modvat credits had been taken on original invoices and these have been denied as they were taken on other than duplicate copy of the invoices which are not relevant documents in terms of Notification No. 4/94 N.T., dated 1-3-1994.
2. The appellants have requested vide their letter dated 23-6-1999 for decision on merits.
3. Heard Sri S. Sankaravadivelu, learned JDR, who reiterated the Order-in-Original and the order impugned.
4. I have carefully considered the records of the case including submissions made in writing by the appellants. As far as the question of denial of Modvat credit on the goods short received is concerned, I find that the explanation that the minor shortage was due to dryage and due to handling is sufficient and logical reasons shown. The main point arising out of this dispute is that the credit taken does not exceed the duty paid on the invoices. Merely because after receipt it was found that certain small percentage of the inputs had been subjected to transit/handling losses, the credit of duty already paid by the recipient of the inputs cannot be denied. As far as the question of availment of Modvat credit on original invoice is concerned, I find that the matter is no longer res integra.-ln the case of Apex Steels P. Ltd. v. C.C.E. as reported in 1995 (80) E.L.T. 368 (T) it has been held that Modvat credit where otherwise due ought to be allowed even if prescribed procedure could not be followed. In the case of C.C.E. v. Unichem Trading Co.(P) Ltd. as reported in 1998 (102) ELT 284 (T), it has been held that Modvat credit cannot be denied merely because it was taken on the strength of original invoice, since the absence of the correct document is merely a procedural lapse. A similar view was taken in the case of C.C.E. v. National Boards Ltd. as reported in 1998 (28) RLT 644 (CEGAT) wherein it was held that Modvat credit cannot be denied on a technical ground like being based on the original copy of the invoices. The ratio of these decisions are clearly applicable to the facts of the present case. It has not been alleged by the department that the credit was otherwise not due or original invoices were fraudulent in any way. The only objection of the department had been that the credit was taken on original invoices instead of duplicate. Therefore, respectfully following the ratio of the above cited case-laws, I find that the Order-in-Appeal impugned needs to be set aside and the appeal allowed with consequential relief, as per law on the issues discussed above. Ordered accordingly.