2004 (1) TMI 593 - AT - Central Excise

Summary

Issues:
- Appeal against the common Order-in-Appeal allowing appeals by assessees regarding Modvat credit denial.
- Dispute over endorsement on invoices for Modvat credit availed under Rule 57A.
- Question of denying Modvat credit due to procedural lapses.
- Interpretation of Trade Notice No. 87/95 regarding endorsement of invoices.
- Substantive right of assessees to avail Modvat credit despite technical lapses.

Analysis:
The judgment involves four appeals by the Revenue challenging the Order-in-Appeal that set aside orders disallowing Modvat credit for assessees manufacturing branded cigarettes. The dispute revolves around the endorsement on invoices for Modvat credit under Rule 57A, specifically related to vehicle registration numbers and transfer of consignments. The Commissioner (Appeals) allowed the appeals of the assessees, emphasizing compliance with substantial Modvat provisions despite technical lapses in invoice endorsements.

The Revenue contended that adherence to Trade Notice No. 87/95 is crucial for accruing Modvat rights entirely, arguing that the assessees disregarded Board instructions, seeking to overturn the lower appellate authority's decision. Conversely, the assessees' representative defended the reasoned order, highlighting the receipt and use of inputs in manufacturing, asserting that substantive benefits should not be denied for minor technical lapses.

Upon review, the Tribunal deliberated on whether denying Modvat credit solely based on the lack of invoice endorsement by the jurisdictional Supdt. was justified. It emphasized the assessees' compliance with duty payments, input usage, and receipt, stating that substantive legal requirements being met should not warrant credit denial for trivial procedural errors. Citing precedents like Devidayal Aluyminium Industries Pvt. Ltd. and Suprabhat Steel Ltd., the Tribunal upheld the lower appellate authority's decision, deeming the denial of Modvat credit in this context excessively severe. It concluded that the assessees' entitlement to Modvat credit should not be forfeited due to minor technicalities, dismissing the Revenue's appeals as lacking merit.

In summary, the judgment clarifies that adherence to substantive Modvat provisions should prevail over minor procedural lapses, ensuring that assessees are not unduly penalized for technical errors in compliance with invoice endorsement requirements under Rule 57G and Trade Notice No. 87/95.