2017 (7) TMI 15 - AT - Central Excise

CENVAT credit - duty paying invoices - duplicate copy if invoices - Sub-rule (6) of Rule 57G of the Central Excise Rules, 1944, provides that a manufacturer may take credit on inputs received in his factory on the basis of original invoice, if duplicate copy of the invoice has been lost in transit, subject to the satisfaction of the Assistant Commissioner that the inputs have been received in his factory and the duty was paid on such inputs - appellant placed reliance in the case of SWADESHI KOREATEX Versus COMMISSIONER OF CENTRAL EXCISE, JALANDHAR 2007 (4) TMI 426 - CESTAT, NEW DELHI . Held that - The supplier of the input had not given the details of payment of duty and debit particulars and therefore there is no basis for availing credit. Similarly, (Sl.No.ix), where the appellant is not the consignee, Modvat credit is not available. It is noted that after introduction of invoice system, the endorsed invoices cannot be accepted. In any event, further, Sl.No.x, credit taken on endorsed Bill of Entry after 01.04.94, I find that the law was amended to take credit on the basis of the invoice of the registered dealer or other procedures, which was not followed by the appellant and therefore, they were not eligible to take Modvat credit. The other item (xii), Modvat credit is not available on the basis of the documents, not covered under Rule 57G. The ld.Counsel submitted that it is a case of transitional period and therefore, credit should not be denied. I find that the Board had issued various circulars for availment of the credit during the transitional period and the appellant had not followed it. Therefore, they are not entitled to avail the credit. Penalties set aside. Appeal allowed - decided partly in favor of appellant.

Issues Involved:
1. Credit taken on original copy of the invoice after 1-4-94.
2. Credit taken for capital goods on original invoice.
3. Credit taken on original copy of the invoice after lapse of six months.
4. Credit taken on the original copy of challan/S.T. challan.
5. Credit taken on Extra copy.
6. Credit taken on endorsed invoice.
7. Credit taken on other copies.
8. Full particulars/debit particulars not available.
9. Where Appellant is not the consignee.
10. Credit taken on endorsed Bills of Entry after 1-4-94.
11. Credit taken on customer copy of the stock transfer challan.
12. Not valid documents under rule 57G.

Detailed Analysis:

1. Credit taken on original copy of the invoice after 1-4-94:
The Tribunal recognized that credit can be taken on the original copy of the invoice if the duplicate copy is lost, as per Rule 57G of the Central Excise Rules, 1944. This was supported by the case of SWADESHI KORETEX Versus COMMISSIONER OF CENTRAL EXCISE, JALANDHAR, where the Hon’ble Punjab & Haryana High Court held that credit on the original invoice cannot be denied if the proper procedure was not followed due to loss of the duplicate copy.

2. Credit taken for capital goods on original invoice:
Similar to the above, it is settled that credit can be taken on the original invoice if the duplicate is lost, provided the inputs are received in the factory and duty is paid on them.

3. Credit taken on original copy of the invoice after lapse of six months:
The appellant submitted evidence showing that all credits were taken within the six-month limit, thus complying with the time restriction.

4. Credit taken on the original copy of challan/S.T. challan:
The appellant argued that the credits were taken on original invoices marked as Stock Transfer or Challan cum Bill. The department did not dispute the duty-paid nature or usage of the goods, thus supporting the appellant’s claim.

5. Credit taken on Extra copy:
Credits were taken on invoices marked as Extra Copy due to retention of original and duplicate copies by Octroi authorities. The Tribunal in COMMISSIONER OF C.EX., KOLKATA-I Versus ASEA BROWN BOVERI LTD. upheld that minor procedural defects should not disallow credit if the basic conditions are met.

6. Credit taken on endorsed invoice:
Credits were taken on endorsed invoices during the transition from gate pass to invoice system. The Tribunal in DEEPTHI INSULATED CABLES PVT.LTD. Versus COMMISSIONER OF C.EX., COCHIN supported credit eligibility despite procedural defects if substantive provisions are met.

7. Credit taken on other copies:
Most invoices were properly marked, and the amount of credit disallowed was minimal. The Tribunal held that credits should be allowed if basic conditions are met, even if procedural markings are missing.

8. Full particulars/debit particulars not available:
The supplier did not provide duty payment details, thus there was no basis for availing credit. The Tribunal agreed with the Adjudicating Authority’s disallowance of credit on this ground.

9. Where Appellant is not the consignee:
Credits on endorsed invoices were not accepted after the introduction of the invoice system. The Tribunal upheld the disallowance of credit as the appellant was not the consignee.

10. Credit taken on endorsed Bills of Entry after 1-4-94:
The law required credit to be taken on invoices of registered dealers, which was not followed. The Tribunal upheld the disallowance of credit.

11. Credit taken on customer copy of the stock transfer challan:
Credits were taken on pre-printed stationery marked as Duplicate for Transporter. The Tribunal found these documents proper and allowed the credit.

12. Not valid documents under rule 57G:
During the transitional period, the appellant did not follow the Board’s circulars for credit availment. The Tribunal upheld the disallowance of credit due to non-compliance with procedural requirements.

Conclusion:
The Tribunal modified the impugned order by disallowing Modvat credit on the issues discussed above while allowing credit on other items. The penalty was set aside as the issues involved interpretation of law. The appeal was thus partly allowed.

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