2004 (4) TMI 461 - AT - Central Excise

Summary

Issues: Denial of Modvat credit on disputed invoices

Analysis:
The appeal before the Appellate Tribunal CESTAT, New Delhi revolved around the denial of Modvat credit to the appellants concerning six disputed invoices. The issue primarily stemmed from discrepancies in the invoices, specifically the absence of the duty amount paid on the goods, inconsistencies in vehicle numbers between original and duplicate invoices, and variations in the time of issuance.

Upon reviewing the records and hearing arguments from both parties, it was observed that the denial of Modvat credit was based on the mentioned grounds. However, it was noted that all the invoices in question were issued before January 1995, when the invoice form was required to be filed by registered dealers while clearing inputs. The Commissioner (Appeals) had previously allowed credit for certain goods, acknowledging that the non-mention of duty amount in the invoices was a procedural lapse that could be rectified.

Crucially, it was highlighted that there was no evidence to suggest that the Department had disputed the receipt, duty payment status of the inputs, or their utilization by the appellants in manufacturing final products. Additionally, there was no indication of any show cause notice issued to the supplier of the inputs regarding the authenticity of the invoices. Consequently, the Tribunal determined that the appellants should not be penalized for the supplier's inaccuracies in invoice preparation, especially when the duty paid nature of the goods and their utilization in manufacturing final products were undisputed.

In conclusion, the impugned order of the Commissioner (Appeals) was set aside, and the appeal of the appellants was allowed, with any consequential relief deemed permissible under the law. This judgment underscores the importance of considering the substantive aspects of transactions over procedural discrepancies in invoices when determining Modvat credit eligibility.