2005 (5) TMI 512 - AT - Central Excise

Summary

Issues:
1. Admissibility of Modvat credit based on original invoice.
2. Retrospective effect of sub-rule (3A) of Rule 57T.
3. Applicability of previous judgments on the current case.

Issue 1: Admissibility of Modvat credit based on original invoice:
The original authority allowed Modvat credit but imposed a penalty, which was sustained by the first appellate authority. The appellants claimed the credit based on the original invoice, which was not normally permissible at the time. They applied for permission to use the original invoice after receiving a show-cause notice. The Assistant Commissioner accepted their explanation and allowed the credit. However, the Commissioner (Appeals) set aside this decision, stating that sub-rule (3A) of Rule 57T, introduced by Notification No. 14/96-C.E. (N.T.), did not have retrospective effect to cover the disputed period. The Tribunal found that the capital goods credit was taken based on the original invoice, which was not the proper duty-paying document at that time. Therefore, the appeal was dismissed, upholding the Commissioner's decision.

Issue 2: Retrospective effect of sub-rule (3A) of Rule 57T:
The Tribunal examined whether sub-rule (3A) of Rule 57T, allowing capital goods credit based on the original invoice in case of loss of the duplicate copy, had retrospective effect. It was noted that no binding case law was presented to show that this sub-rule was introduced retrospectively. The Tribunal held that the sub-rule introduced by Notification No. 14/96-C.E. (N.T.) was not intended to be clarificatory and retrospective. The appellants' argument that the sub-rule had retrospective effect was rejected, citing a previous decision where a similar credit based on the original invoice was allowed before the sub-rule's introduction.

Issue 3: Applicability of previous judgments on the current case:
A previous decision allowing credit based on the original invoice in April 1995 was cited by the appellants. However, the Tribunal clarified that the amendment to Rule 57T was effective from July 23, 1996, and not retrospective. The Tribunal deemed the previous decision allowing credit based on the original invoice in April 1995 as per incuriam and not applicable to the current case. Therefore, the Tribunal upheld the Commissioner (Appeals) decision, stating that as the credit was taken based on the original invoice when it was not admissible, there was no reason to interfere with the order.

In conclusion, the Tribunal dismissed the appeal, emphasizing that the credit taken based on the original invoice at a time when it was not admissible for Modvat purposes did not warrant interference with the Commissioner (Appeals) decision.