2007 (1) TMI 434 - AT - Central Excise

Summary

Issues:
Inadmissibility of Modvat credit based on quadruplicate copy of invoices.

Analysis:
The appellant filed an appeal against the inadmissibility of Modvat credit amounting to Rs. 33,674 due to availing the credit on quadruplicate copies of invoices. The appellant, engaged in manufacturing M.S. rounds, availed the credit based on the quadruplicate copy of invoices as revealed during scrutiny of the RT-12 return for May 1995. The adjudicating authority confirmed the duty demand and imposed a penalty, which was later set aside by the Commissioner (Appeals) who upheld the demand of duty. The appellant's advocate presented a certificate from the supplier explaining a mistake in the invoice book binding, where quadruplicate copies were used instead of duplicates. The advocate highlighted that the duty-paid goods were received and used in manufacturing final products, with the dealer rectifying the mistake by signing "duplicate for Transporter" on the invoices. The advocate cited relevant case laws to support the appellant's position.

The respondent's representative argued that the denial of credit was based on a Larger Bench decision in the case of Avis Electronics, emphasizing that procedures prescribed in rules must be strictly followed. The respondent contended that Modvat credit should have been availed based on duplicate copies of invoices, not quadruplicate copies as done by the appellant. Upon review, the Tribunal noted that the registered dealer corrected the invoices by replacing "quadruplicate" with "duplicate for Transporter" and provided a certificate explaining the mistake. This correction was undisputed by the lower authorities. Additionally, it was established that the goods were utilized in manufacturing final products and duly recorded. Referring to a High Court decision, the Tribunal ruled in favor of the appellant, citing that the credit availed without seeking permission from the competent authority is not substantial when the duty paid nature of inputs and their use in manufacturing are not in dispute. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief required.