2001 (4) TMI 863 - AT - Central Excise

Summary

Issues:
1. Availing Modvat Credit without possession of duplicate copy of invoice.
2. Interpretation of procedural and substantive conditions for Modvat Credit.
3. Loss of duplicate copy of invoice and its impact on availing Modvat Credit.
4. Application of discretionary power by the Assistant Commissioner.
5. Consideration of judgments by Larger Bench vs. Single Member Bench.
6. Compliance with Notification No. 14/96-C.E. (N.T.) regarding loss of duplicate copy of invoice.

Issue 1: Availing Modvat Credit without possession of duplicate copy of invoice:
The Commissioner of Central Excise filed an appeal against an Order-in-Appeal allowing Modvat Credit despite the assessee not having the duplicate copy of the invoice. The Revenue contended that without the duplicate copy, the credit availed should be expunged. The Commissioner argued that without the duplicate copy, the assessee was not entitled to the benefit of Modvat Credit.

Issue 2: Interpretation of procedural and substantive conditions for Modvat Credit:
The learned DR pointed out that lapses in possessing the duplicate copy of the invoice were of a substantive nature, making them non-condonable. Referring to previous judgments, it was highlighted that the loss of the duplicate copy was a mandatory requirement and not a mere technicality, emphasizing the importance of complying with substantive conditions for availing Modvat Credit.

Issue 3: Loss of duplicate copy of invoice and its impact on availing Modvat Credit:
The Counsel for the respondents argued that Notification No. 14/96 allowed credit on the original invoice if the duplicate copy was lost in transit, subject to the satisfaction of the Assistant Commissioner. However, it was noted that the respondents failed to inform the Assistant Commissioner about the loss of the duplicate copy, leading to the denial of credit based on the original invoice.

Issue 4: Application of discretionary power by the Assistant Commissioner:
The Counsel for the respondents cited a judgment emphasizing the exercise of discretionary power in favor of the assessee. However, it was concluded that the discretionary power should have been sought from the Assistant Commissioner with supporting documents, which was not done in this case.

Issue 5: Consideration of judgments by Larger Bench vs. Single Member Bench:
The learned DR argued that judgments by Larger Bench should take precedence over those by Single Member Bench. The distinction between the facts of the present case and those in the cited judgments was highlighted to support following the decisions of the Larger Bench.

Issue 6: Compliance with Notification No. 14/96-C.E. (N.T.) regarding loss of duplicate copy of invoice:
The judgment emphasized that compliance with sub-rule (3A) of Notification No. 14/96 was crucial for taking credit on the original copy in case of loss of the duplicate copy. Since the assessee did not satisfy the Assistant Commissioner regarding the loss of the duplicate copy, the credit taken on the original copy was deemed inadmissible.

In conclusion, based on the interpretations of substantive conditions for Modvat Credit and the failure to comply with the requirements of Notification No. 14/96, the Revenue appeal was allowed, setting aside the Order-in-Appeal that allowed Modvat Credit without possession of the duplicate copy of the invoice.