2002 (6) TMI 473 - AT - Central Excise

Summary

Issues:
Whether Modvat credit of duty was available to the Respondents.

Analysis:
The appeal filed by Revenue questioned the availability of Modvat credit to the Respondents, specifically focusing on the method of taking credit based on original copies of invoices rather than duplicate copies. The Commissioner (Appeals) considered the time-bar issue of the show cause notice, which was issued on 28-6-95, regarding the credit taken by the Respondents on 17, 19, and 24th December. The Commissioner (Appeals) noted that the requirement of taking credit based on duplicate copies of invoices came into effect after the amendment by Notification No. 2/95-C.E. (N.T.), dated 19-1-95, which altered Rule 57GG. The Revenue contended that the show cause notice was within the time limit as per the amended Rule 57-I, despite the Respondents' reliance on original invoices. The Respondents argued that their credit was lawful as it was taken before the amendment of Rule 57GG, and the Board's Circular from 24-10-94 supported their position. They also emphasized that the time limit should be calculated from the date of taking the credit, making the show cause notice time-barred.

The Tribunal analyzed the submissions from both sides and reviewed the relevant notifications and rules. It was observed that Notification No. 32/94-C.E. (N.T.), dated 4-7-94, did not specify that Modvat credit could only be claimed based on duplicate copies of invoices. The requirement to use duplicate copies was introduced later by Notification No. 2/95-C.E. (N.T.). Since this requirement was not part of the law when the Respondents claimed the credit, the Tribunal found that the credit was rightfully availed of. The Tribunal referenced a previous decision in the case of Parikh Chemical Industries, which supported the view that the requirement of using duplicate invoices was introduced after the Respondents' actions. Therefore, the Tribunal held that the Modvat credit was not deniable to the Respondents. Consequently, as the Respondents were deemed eligible for the credit, the Tribunal did not address the time-limit issue regarding the show cause notice. Ultimately, the appeal filed by the Revenue was rejected based on the Tribunal's decision regarding the availability of Modvat credit to the Respondents.