2001 (2) TMI 178 - AT - Central Excise

Summary

Issues:
Whether Modvat credit can be taken based on a transporter's copy issued by a dealer who cannot produce the original transporter's copy.

Analysis:
In a series of appeals, the main issue revolved around the eligibility of manufacturers to claim Modvat credit based on transporter's copies provided by dealers who were unable to produce the original transporter's copy. The appellants, in this case, were involved in manufacturing Iron & Steel Products and procured goods from registered dealers like SAIL, TISCO, MMTC, or their depots. The dispute arose when the Excise authorities discovered that the SAIL and TISCO depots did not possess the proper duplicate copy of the invoice, leading to the contention that the documents provided by these dealers were invalid for claiming Modvat credit. The authorities upheld this view, resulting in demands for duty equivalent to the Modvat credit taken by the appellants.

During the proceedings, the appellant's counsel argued that the Modvat credit was rightfully claimed based on the transporter's copy issued by the registered dealer, emphasizing that any irregularities on the dealer's end should not be attributed to the appellants. Reference was made to a previous Tribunal ruling in a similar case, where it was held that as long as the Modvat credit was claimed in accordance with the rules, there was no basis for denial. The counsel contended that if any irregularity existed with the dealer, appropriate action should have been taken against them, not the manufacturers who relied on the provided documents.

On the other hand, the respondent Commissioner's representative argued that since the dealer failed to produce the transporter's copy themselves, the Modvat credit claimed by the appellants was irregular. However, upon careful consideration, the Member (T) found no fault in the appellants' action of claiming credit based on the transporter's copy issued by the registered dealer. It was concluded that any issues related to the dealer's compliance should be addressed directly with the dealer, rather than penalizing the manufacturers. The judgment highlighted that the cited precedent supported the appellant's position, leading to the allowance of all five appeals. The decision ensured that any consequential relief due to the appellants would be granted in accordance with the law.