Customs, Excise and Gold Tribunal - Delhi
Bhumra Steel Industries vs Cce, Chandigarh on 17 January, 2001
Equivalent citations: 2001(76)ECC705
ORDER
P.G. Chacko
1. The appellants are manufacturers of Iron and Steel Products and are availing modvat credit facility under Rule 57A of the Central Excise Rules. During November-December, 1994 they took modvat credit on duty-paid inputs supplied by certain registered dealers, amounting to Rs.1,26,324.90, on the strength of 7 invoices issued under Rule 57G by the respective dealers. Department proposed to disallow the credit on the ground that the invoices were not acceptable as valid duty-paying documents. The appellants contested the proposed action. The dispute was adjudicated by the jurisdictional Assistant Commissioner, who as per Order dated 22.5.98 accepted 2 out of the 7 invoices and allowed to the party the modvat credit taken on the strength of the (sic) invoices. The remaining 5 invoices, which were mentioned at Sl. Nos. 1 to 5 in the Annexure to the show-cause notice, were held to be unacceptable on the ground that certain particulars stated in the invoices could not be correlated (by the party) with the corresponding particulars in the invoices issued by the input-manufacturers, who, in the instant case, were the Steel Authority of India Ltd. (SAIL). The credit so disallowed amounted to Rs.97/267/- (sic) penalty of Rs. 10,000/- was also imposed on the party. Aggrieved by this decision, the assessees preferred appeal to the Commissioner (Appeals). The lower appellate authority upheld the Assistant Commissioner's order. Hence the appeal before the Tribunal.
2. I have carefully examined the records and heard both sides. Ld. Advocate, Sh. K.K. Anand for the appellants submits that the modvat credits in question had been taken on the strength of invoices issued by the registered dealers and that such invoices contained particulars which substantially satisfied the requirements of Notification No. 33/94-CE(NT) dated 4.7.97. He further submits that it was only in respect of one particular entry in each of the dealers invoices that the adjudicating authority found deficiency and the said entry related to the Sl. Nos. and dates of invoices issued by the input-suppliers and the input-manufacturers. The Assistant Commissioner found such deficiency in only one of the invoices. Ld. Advocate submits that, in respect of the rest of the invoices, the adjudicating authority did not care to look into the documents supplied by the party. The finding of the Assistant Commissioner was that, instead of the number and date of SAIL invoice, the dealer had recorded in their invoice the number and date of delivery order. However, the correct number and date or SAIL (plant) invoice had been entered in the SAIL (depot) invoice/delivery challan as well as in the dealer's invoice, which fact was not in dispute. Further, the dealer's certificate showed the correct number and date of SAIL (depot) invoice/delivery challan. Though such invoices/delivery challan. Though such invoices/delivery challans of SAIL and certificates of the dealer were also furnished by the party, none of these documents was duly considered by the adjudicating authority for reconciliation of the defect found by it in the duty-paying documents. Ld. Advocate submits that the order of the Assistant Commissioner is not sustainable on account on non-consideration of the relevant materials supplied by the party. He further submits that the lower appellate authority also did not discuss the relevant issue in detail, nor did it consider the documents of the party. The impugned order is, therefore, liable to be set aside. Ld. Advocate, in this connection, has relied on the decision of the Larger Bench in the case of Kamakhya Steels Pvt. Ltd. Vs. CCE [2000 (40) RLT 575], wherein the Bench held that the circular issued by the Board in February 1999 directing the field formations to dispose of all pending modvat cases in the light of the amendments to Rule 57G under Notification No. 7/99-CE(NT) dated 9.2.99, would also apply to matters which came up before the authorities pursuant to the Tribunal's remand orders. Ld. Advocate has relied on this ruling in support of his submission that it is incumbent upon the departmental authority to consider the appellant's modvat claim in the light of the Board's Circular in the event of remand of the present dispute to it by the Tribunal. Ld. Advocate has also urged the need of a remand on the basis of the facts and circumstances of the case.
3. Ld. SDR Sh. M.D. Singh has referred to the provisions of Rule 57GG and has submitted that it was mandatory, under those provisions, for the appellants to establish the correlation of the particulars in the registered dealer's invoices with the corresponding particulars in the invoices of SAIL. He submits that anything contained the Board's Circular issued in 1999 would have no application to the dispute which arose in 1994. According to him, the deficiencies found by the adjudicating authority and subsequently affirmed by the Commissioner (Appeals) have not been made up by the appellants by placing on record sufficient documentary evidence, even at this stage. He, therefore, prays for upholding the impugned order and rejecting the appeal.
4. I have carefully examined the above submissions. I have also scrutinised the documents placed on record by the appellants. Some of the 5 invoices in question were issued by a registered dealer namely Sukhdev Steel Rolling Mills and the other invoices by another registered dealer namely Data Steels. Both these dealers had purchased the inputs covered by the invoices, from SAIL depot. The SAIL depot had issued delivery challans at the time of supply of the goods to the dealers. The defect found in respect of the invoices of Sukhdev Steels was that the number and date of the invoice (challan) issued from the SAIL depot, was not furnished. But this mistake has been sought to be rectified by the appellants by way of a certificates issued by the dealer, which shows the SAIL depot invoice (challan) number and date. Even the number and date of the original invoice issued by SAIL plant is seen stamped on the dealer's invoice. The copies of the SAIL depot's invoice (challan) and the SAIL plant's invoice, available on record, have been examined by me and I find sufficient correlation of the particulars in the dealer's invoices with those in the SAIL depot challans and the SAIL plant invoices. I do not find any discrepancy with regard to the quantities of the goods or the amounts of duty paid thereon. Therefore, as regards the invoices issued by M/s Sukhdev Steels to the appellants, all the requirements under Notification No. 33/94 dated 4.7.94 stand substantially complied with and the appellants are entitled to the modvat credit on the goods covered by such invoices. As regards the remaining 3 invoices issued by M/s Data Steels, I note that there is absolutely no application of mind either by the adjudicating authority or by the lower appellate authority to the documents furnished by the party in support of their submission that any deficiency in such invoices had been reconciled by them. Therefore, on this count, the matter must go back to the adjudicating authority.
5. In the light of the above findings with regard to the modvat credits taken by the appellants on the strength of the invoices issued by Sukhdev Steels Rolling Mills, I allow the credits. As regards the modvat credits taken on the stregth of invoices issued by M/s Data Steels, the Assistant Commissioner shall carefully scrutinise such invoices and all the documents submitted by the party and shall decide upon the admissibility of the credits in terms of Notification No. 33/94-CE(NT) dated 4.7.94 and Notification No. 7/99-CE(NT) dated 19.2.99 read with Board's Circular No. 441/7/99 dated 23.2.99, having regard to the decision of the Tribunal's Larger Bench in Kamakhya Steels (supra). Needless to say, the party shall be given a reasonable opportunity of personal hearing by the Assistant Commissioner before passing final order. The orders of the Assistant Commissioner and the Commissioner (Appeals) will stand set aside. The appeal stands allowed in the aforesaid terms.