2008 (6) TMI 392 - Commissioner - Central Excise

Summary

Issues:
1. Delay in quasi-judicial proceedings.
2. Availment of Modvat credit on invoices lacking prescribed particulars.
3. Interpretation of Board's Circular on retrospective operation.
4. Denial of credit for procedural lapses.

Delay in Quasi-Judicial Proceedings:
The judgment highlights the extraordinary delay in the case, spanning over a decade from the date of filing the reply to the final issuance of the order. The judgment criticizes the lackadaisical functioning of the Department's quasi-judicial system, acknowledging the disenchantment and disaffection of the Appellant due to the system's inadequacy. Emphasizing the loss of credibility and the need to avoid exacerbating delays at the appellate level, the judgment calls for urgent disposal of the case to address the neglect and malaise within the system.

Availment of Modvat Credit:
The case involved the appellant availing Modvat credit on invoices issued by M/s. Steel Authority of India Ltd. The issue arose as the invoices did not contain particulars as prescribed under relevant notifications. The Appellant contended that the invoices were duly verified and that no dispute regarding duty payment on the inputs existed. Citing a Circular by the Central Board of Excise & Customs and a Tribunal decision, the Appellant argued that credit should not be denied for minor technical lapses when the duty paid nature of inputs was not in question.

Interpretation of Board's Circular:
The judgment criticized the Additional Commissioner for holding that a Board's Circular had prospective operation, contrary to settled legal principles that Circulars have retrospective effect. Referring to a Supreme Court decision, the judgment emphasized that Circulars should be interpreted to have retrospective application, thus disagreeing with the Commissioner's interpretation of the Circular's temporal scope.

Denial of Credit for Procedural Lapses:
In analyzing the case law and precedents, the judgment found the impugned order unsustainable and set it aside. Citing a previous decision by the Hon'ble CESTAT, the judgment concluded that credit should not be denied for procedural lapses when the duty paid nature of inputs and their receipt at the appellant's factory were not in dispute. Consequently, the appeal was allowed, granting consequential relief as per the law.

In conclusion, the judgment addressed the issues of delay in quasi-judicial proceedings, the denial of Modvat credit for procedural lapses, and the interpretation of Circulars with retrospective effect, ultimately ruling in favor of the Appellant and setting aside the impugned order.