2002 (12) TMI 467 - AT - Central Excise

Summary

Issues:
Availability of Modvat credit to the respondent based on invoices not complying with legal requirements.

Analysis:
The central issue in this appeal was whether Modvat credit could be granted to the respondent company based on invoices that did not meet the legal standards. The appellant contended that the Modvat credit could only be availed if the inputs were received with proper duty paying documents. The appellant pointed out several deficiencies in the invoices, such as missing information like duty per unit, rate of duty, vehicle registration number, and incorrect colors of duplicate copies, among others. The appellant argued that these requirements were mandatory as per Notification No. 3/95 C.E. and should be strictly adhered to for claiming Modvat credit. Citing the decision in Commissioner of Central Excise v. Avis Electronics Pvt. Ltd., the appellant emphasized the importance of complying with prescribed rules for availing credit.

On the other hand, the respondent argued that the discrepancies in the invoices were minor technical issues and did not affect the receipt of inputs or the payment of appropriate duty. The respondent highlighted that in a previous case, the Appellate Tribunal had allowed Modvat credit despite a similar issue with the color of the invoice, following a relevant Board's Circular. The respondent also referred to other decisions supporting their stance on procedural lapses being minor and not grounds for denying Modvat credit.

The Tribunal considered both parties' submissions and referred to a Circular issued by the Central Board of Excise & Customs, which allowed for ignoring minor procedural lapses in certain cases for granting Modvat credit. The Tribunal noted that the Circular emphasized the importance of ensuring duty payment nature of goods and the necessary information on invoices before denying Modvat credit solely on procedural grounds. The Tribunal found that the Revenue did not dispute the receipt of goods or the duty paid nature of the goods in question. Therefore, the Tribunal rejected the appeal, stating that the Modvat credit could not be denied based on procedural lapses alone, especially when the essential requirements were met, and the duty paid nature of the goods was not in question.

In conclusion, the Tribunal's decision emphasized the importance of balancing procedural requirements with the substantive aspects of duty payment and receipt of goods while considering Modvat credit claims. The judgment clarified that minor procedural lapses should not be a sole reason for denying credit if the essential aspects of duty payment and receipt were not in dispute.