2001 (11) TMI 103 - AT - Central Excise

Summary

Issues Involved:
1. Validity of numbering on invoices by stamping from a franking machine under Rule 52A(6) of the Central Excise Rules, 1944.
2. Admissibility of Modvat credit based on invoices not having pre-printed serial numbers.
3. Compliance with Rule 57G and Rule 57GG regarding the procedure for taking Modvat credit.

Detailed Analysis:

Issue 1: Validity of Numbering on Invoices by Stamping from a Franking Machine
The primary issue in this appeal is whether the numbering on the invoice could be by stamping from a franking machine to satisfy the requirements under Rule 52A(6) of the Central Excise Rules, 1944. The original authority held that since the serial number was not printed as provided under Rule 52A(6), the invoice was not in the proper format, making the Modvat credit of duty taken inadmissible. The appellate authority dismissed the appeal without addressing the merits due to non-compliance with pre-deposit requirements. The appellant contended that the term "printed" should include numbers imprinted by a franking machine or typewriter, arguing that such methods satisfy the statutory requirement.

Issue 2: Admissibility of Modvat Credit Based on Invoices Not Having Pre-Printed Serial Numbers
The appellant argued that the invoices were duly numbered by a numbering machine and accepted by the Department through a Trade Notice. They further contended that minor technical errors should not disqualify them from Modvat credit. The original authority, however, affirmed the demand, stating that the Modvat credit was inadmissible due to the lack of pre-printed serial numbers and improper format of invoices. The Tribunal examined various precedents, noting conflicting views on whether handwritten, typewritten, or rubber-stamped serial numbers meet the statutory requirements. The Tribunal agreed with the view that typewritten or stamped serial numbers suffice, emphasizing the importance of ensuring duty payment and proper use of inputs over strict compliance with invoice formatting.

Issue 3: Compliance with Rule 57G and Rule 57GG Regarding the Procedure for Taking Modvat Credit
Rule 57G outlines the procedure for manufacturers to take credit of duty paid on inputs, requiring specific documents and declarations. The Tribunal noted that Rule 57G was amended to include sub-rule (11), which allows credit even if documents lack some particulars, provided essential details like duty payment and goods description are present. A circular issued in 1999 supported this lenient approach. Rule 57GG requires registered persons issuing invoices to follow specific procedures, including printed serial numbers. The Tribunal interpreted "printed" broadly, allowing for numbers stamped by a franking machine or typewritten, aligning with the amended Rule 57G and related circulars.

Conclusion:
The Tribunal concluded that the appellant cannot be denied Modvat credit solely because serial numbers were stamped from a franking machine. Compliance with the rules is sufficient if the serial numbers are stamped or typed, ensuring no misuse of invoices. The matter was remanded for further consideration by the appropriate Bench, aligning with the broader interpretation of "printed" and the legislative intent to focus on substantive compliance over procedural technicalities.