2005 (11) TMI 413 - AT - Central Excise

Summary

Issues:
Claiming Modvat/Cenvat credit on inputs and capital goods received with discrepancies in manual and computerized invoices.

Analysis:
The appellants, engaged in manufacturing goods falling under Chapter 72 of the Central Excise Tariff Act, 1985, claimed Modvat/Cenvat credit on inputs and capital goods received from a supplier. The issue arose when discrepancies were found between the manual and computerized invoices received from the supplier, M/s. Rashtriya Ispat Nigam Ltd. The Department disallowed the credit and imposed a penalty, leading the appellants to appeal to the Commissioner (Appeals).

The Commissioner (Appeals) disallowed the credit based on four grounds: lack of cross-reference between manual and computerized invoices, time difference between the invoices, discrepancy in vehicle number, and absence of product grade in the manual invoice. The supplier, M/s. RINL, explained that their computer system was down on the date of issuance of the manual invoices, which led to the discrepancies.

Upon examination of the invoices, the judge noted minor differences in time, vehicle number, and product grade between the manual and computerized invoices. However, no evidence was presented to prove any mala fide intent or non-receipt of goods by the appellants. The judge referred to relevant case law and excise rules supporting the appellants' claim for credit despite discrepancies in the invoices.

The judge concluded that the appellants, despite acting in haste to avail the credit against supplier instructions, should not be penalized for minor discrepancies caused by the supplier's system breakdown. The judge found no merit in the Department's grounds for disallowing the credit and ruled in favor of the appellants, setting aside the lower authorities' order and allowing the appeal in full.