9911796707
|
Home
Issues:
- Interpretation of Modvat credit availability on endorsed invoice under Rule 57G of Central Excise Rules, 1944 read with Notification No. 15/94-C.E. (N.T.), dated 30th March, 1994. Analysis: 1. The reference application under Section 35H (1) of the Central Excise Act, 1944 sought clarification on the availability of Modvat credit on endorsed invoices. The question of law presented was whether Modvat credit is permissible on endorsed invoices as per the relevant provisions. 2. The respondent-assessee, engaged in manufacturing Spun Yarn, availed Modvat credit on inputs purchased indirectly from M/s. Terene Fibres India Ltd. through M/s. Reliance Industries Ltd. The dispute arose when the Assessing Officer questioned the validity of endorsed invoices for claiming Modvat credit. 3. In the appeal before the Commissioner (Appeals), the contention centered around the Modvat credit availed based on invoices without physical receipt of goods due to transit sale. The Commissioner (Appeals) noted that the Trade Notices did not mandate physical receipt before subsequent sale, allowing transit sales for Modvat credit. 4. The Tribunal, following precedent, upheld that physical possession of goods at the dealer's premises was not a prerequisite for availing Modvat credit based on endorsed invoices. The Revenue challenged this decision in an appeal, emphasizing the endorsement of invoices without physical receipt by the dealer. 5. The Court clarified that Modvat credit eligibility is not limited to immediate purchasers, extending to those using duty-paid goods in manufacturing. The endorsed invoices, serving as proof of duty payment, were deemed valid for claiming Modvat credit by the subsequent purchaser. 6. The Court emphasized that the requirement under Rule 57G was to provide documents proving duty payment on inputs. The dispute centered on the endorsement of invoices by the first dealer before physical receipt, which the Court deemed acceptable based on the legal provisions and trade practices. 7. Referring to a previous judgment, the Court highlighted that the bill of entry evidencing duty payment sufficed for Modvat credit, even if the imported goods were not used by the importer but by subsequent purchasers in manufacturing. 8. The Court concluded that no substantial question of law arose regarding the endorsement of invoices for claiming Modvat credit. The reference application was dismissed, affirming the validity of availing Modvat credit based on endorsed invoices in transit sales.
|
