2004 (4) TMI 506 - AT - Central Excise

Summary

Issues: Stay application for recovery of duty amount denied due to validity of endorsed invoices post 1-4-2000.

In this judgment by the Appellate Tribunal CESTAT, CHENNAI, the issue at hand was a stay application regarding the recovery of duty amount of Rs. 93,892, which was denied credit because endorsed invoices were considered invalid after 1-4-2000. The appellant argued that the manufacturer had initially issued the invoice to a consignee who refused the goods, leading to the diversion of the goods to another consignee with the endorsement of the Range Superintendent. The appellant contended that credit should not be denied based on Circular No. 207/41/96-CX. The respondent, on the other hand, cited a Tribunal decision stating that endorsed invoices post 1-4-1994 are not valid for claiming Modvat credit due to the difficulty in verifying the duty paid character of the goods.

The Tribunal, after hearing both sides, considered the unique circumstances of the case where the goods were diverted to another consignee due to the rejection by the initial consignee, making it impossible to issue new invoices. The Range Superintendent endorsed the invoice for the diverted consignee, making verification of the duty paid character of the goods feasible. Consequently, the Tribunal allowed the stay application, permitting the appeal to proceed without pre-depositing the disputed amount. The judgment highlights the importance of considering the specific facts and practicalities of each case in determining the validity of endorsed invoices for claiming credit, emphasizing the need for verifiability of duty paid character in such situations.