2007 (8) TMI 96 - AT - Central Excise

Cenvat/Modvat - Revenue filed an appeal against the decision of the Commissioner through which allowed Cenvat credit to the assessee on the basis of photocopy of the office copy of the extra copy of invoices - Tribunal set aside the order and allow the appeal

Summary

Issues:
Challenge to disallowance of Modvat credit based on photocopies of invoices.

Analysis:
The case involved a challenge by the Revenue against the disallowance of Modvat credit of Rs. 80,562 by the Commissioner (Appeals). The assessee, a manufacturer of ferro alloys, had availed credit based on photocopies of invoices. The adjudicating authority found that the assessee did not receive the original invoices and thus disallowed the credit. However, the Appellate Commissioner overturned this decision, noting that the assessee had lost both copies of the invoices and filed a complaint with the police. The Appellate Commissioner relied on previous tribunal decisions and directed the credit to be allowed on certified copies of invoices, subject to verification by the jurisdictional Range Superintendent.

The Appellate Commissioner's decision was based on the premise that the loss of invoices was accidental and should not deprive the assessee of legitimate credit. However, it was argued that certified copies of invoices were not sufficient for claiming Modvat credit, as the duplicate copy of the invoice used for transporting goods was crucial for credit under the rules. The Tribunal emphasized the importance of the transporter's copy for verifying the receipt of goods and highlighted previous judgments reinforcing the necessity of adhering to prescribed rules for claiming credit.

In light of the legal framework and previous tribunal decisions, it was concluded that availing Modvat credit based on photocopies of invoices was impermissible. The circular issued by the CBEC also explicitly stated that photocopies should not be accepted for credit purposes. Therefore, the Appellate Commissioner's decision was set aside, and the order of the adjudicating authority disallowing the credit was restored. The appeal by the Revenue was allowed based on the legal provisions and precedents governing Modvat credit claims.

In summary, the judgment addressed the issue of claiming Modvat credit based on photocopies of invoices, highlighting the importance of adhering to prescribed rules and the necessity of the duplicate copy of the invoice for credit purposes. The decision underscored that certified copies were not sufficient for claiming credit and emphasized the legal provisions and previous tribunal decisions that prohibited availing credit on the basis of photocopies. The judgment ultimately upheld the disallowance of Modvat credit based on photocopies, citing legal frameworks and circulars that mandated adherence to specific documentation requirements for credit claims.