2008 (5) TMI 509 - AT - Central Excise

Cenvat/Modvat credit - Documents for availing credit - Held that - reliance placed in the case of Vimal Enterprise 2005 (7) TMI 111 - HIGH COURT OF GUJARAT AT AHMEDABAD wherein it has been held that when the transaction is genuine identity of supplier of inputs is established document showing duty payment is supported by facts and records of supplier of inputs show that he purchased the duty paid goods/inputs before resale and passed on the credit of duty thereon credit could not be denied on the basis of technical breaches to assessee who used those inputs for manufacturing final products - appeal allowed - decided in favor of appellant.

Summary

Issues: Denial of Modvat credit in respect of seven invoices

Analysis:
The appeal was filed against the Order-in-Appeal No. 94/97 (H) CE dated 25-9-97, passed by the Commissioner of Customs & Central Excise (Appeals), Hyderabad. The issue at hand was the denial of Modvat credit in respect of seven invoices by the Original and Appellate authorities. The total credit involved amounted to Rs. 5,03,020/-. The appellant contended that they were unable to submit the duplicate copy of one invoice as it had been recovered by the check post authority. Regarding the remaining six invoices, it was alleged that they were issued by unregistered dealers, leading to the denial of Modvat credit. The appellant cited various case laws to support their argument, including the Tribunal decision in the case of Swadeshi Koreatex v. Commissioner of Central Excise, Jalandhar, where it was held that credit taken on the basis of original invoices cannot be denied if the duplicate copy was taken away by authorities during transit. The appellant also relied on the decision of the Punjab & Haryana High Court in the case of Commissioner of Central Excise, Ludhiana v. Ralson India Ltd., emphasizing that the registration of dealers is a procedural requirement not in the control of the assessee. Additionally, the appellant referred to the decision of the High Court of Gujarat in the case of Vimal Enterprise, which stated that credit should not be denied based on technical breaches if the transaction is genuine and duty payment is supported by facts.

The Tribunal, after considering the arguments and case laws presented by the appellant, concluded that the decision of the Commissioner (Appeals) was not sustainable. Therefore, the appeal was allowed with consequential relief. The operative portion of the order was pronounced on 9-5-2008.