2004 (12) TMI 492 - AT - Central Excise

Summary

Issues:
Denial of Modvat credit on invoice with two serial numbers.

Analysis:
The appellant was denied Modvat credit of Rs. 90,900 on an invoice with two serial numbers, leading to a Show Cause Notice and subsequent confirmation of demand and penalty by the Additional Commissioner and the Commissioner (Appeals). The main issue for determination was whether the appellant could claim the Modvat credit relating to the period 1995. The authorities did not consider the invoice with two serial numbers as a valid duty paying document under Rule 52A of the Central Excise Rules, which requires a printed serial number on invoices to prevent double availment of Modvat credit.

The appellant argued that the printed serial number on the invoice was relevant for excise purposes, while the additional number was for internal accounting. The appellant relied on a letter from the Office of the Superintendent of Central Excise, Range-II, Surat-I, which clarified the use of computerized invoices with pre-printed serial numbers for internal accounting control. Additionally, the appellant cited a decision of the Larger Bench and CBEC Circulars to support their claim that credit should not be denied on technical grounds if the receipt and use of inputs are not disputed.

The Tribunal found that the denial of Modvat credit was purely on technical grounds and that there was no dispute regarding the receipt and use of inputs in the manufacturing process. Therefore, the authorities could not disallow the Modvat credit based solely on the presence of two serial numbers on the invoice. The Tribunal set aside the impugned order, allowing the appeal and granting the Modvat credit of Rs. 90,900 to the appellant.