2003 (10) TMI 540 - AT - Central Excise

Summary

Issues:
1. Disallowance of Modvat credit and imposition of penalty based on the format of invoices.
2. Disagreement between lower authorities and the appellant regarding denial of credit.
3. Requirement of registration under Rule 57GG and duty payment particulars in invoices.
4. Discrepancies in duty payment particulars and correlation with invoices.
5. Admissibility of credit based on duty paying nature of inputs and utilization in manufacturing.

Analysis:

1. The appellants were issued two show-cause notices proposing disallowance of Modvat credit and imposition of penalty due to alleged discrepancies in the format of invoices. The main issue was the duty-paid character of materials received under the invoices from the disposal store of a steel plant, which was deemed unascertainable.

2. The appellants responded to the show-cause notices, explaining that any discrepancies in the duty-paying document should not result in credit denial. However, the Asstt. Commissioner and Commissioner (Appeals) upheld the denial of credit as proposed in the notices, leading to the appeal challenging the impugned order.

3. The appellate authority considered the requirement of registration under Rule 57GG and duty payment particulars in the invoices. The authority noted discrepancies in the duty payment particulars and the absence of ECC number in the documents, suggesting a lack of registration. However, the appellate counsel argued that these discrepancies were curable defects and should not lead to credit denial.

4. Upon examination, it was found that the duty payment amounts in the Delivery Advices did not directly correlate with the invoices issued to the appellants. The discrepancy was explained by the fact that the Delivery Advices covered more quantities received by the disposal store than those reflected in the invoices, indicating additional purchases. The absence of ECC code was considered a curable defect.

5. The absence of ECC code or other discrepancies in duty-paying documents were deemed curable defects. As long as the duty-paying nature of inputs and their utilization in manufacturing were not in dispute, the credit of duty could not be denied. The corresponding PLA entries showing duty paid against the invoices were certified, supporting the admissibility of credit to the appellants.

In conclusion, the appeal was allowed by way of de novo remand to the Commissioner (Appeals) for a reevaluation of the invoices as admissible documents and a determination of the credit eligibility after providing the appellants with a reasonable opportunity to present their case.