2002 (2) TMI 1142 - AT - Central Excise

Summary

Issues:
Denial of Modvat credit on inputs based on invoices issued by second stage dealer without proper authentication.

Analysis:
The case involved the denial of Modvat credit to the appellants by both lower authorities based on four invoices issued by M/s. Tannen Poles & Tubes (P) Ltd. The invoices were claimed to be issued as second stage dealer but had a misprint mentioning "first stage dealer." The department alleged that the invoices were not pre-authenticated by the proper officer of Central Excise. The party produced a certificate from the supplier rectifying the misprint issue, but the adjudicating authority upheld the denial of credit and imposed a penalty. In the appeal, the Commissioner (Appeals) affirmed the lower authority's decision, leading to the current appeal.

The appellant's representative argued that the misprint was a curable defect and presented Tribunal decisions supporting the position that Modvat credit should not be denied for minor curable defects if substantive requirements were met. Regarding pre-authentication, it was noted that the adjudicating authority found the invoices to be pre-authenticated as per the relevant notification, a finding unchallenged by the Commissioner (Appeals). The respondent's representative acknowledged that the invoices were in the format of second stage dealer invoices but pressed for upholding the denial based on lack of proper authentication.

Upon examination, the judge observed that the invoices were pre-authenticated as per the notification and that all invoices were in the second stage dealer format, with the misprint issue rectified by the supplier's certificate. As the substantive requirements for Modvat credit were met, the judge held that the credit was admissible, overturning the lower authorities' decisions. Consequently, the penalty imposed was set aside, and the appeal was allowed in favor of the appellants.