2001 (3) TMI 186 - AT - Central Excise

Summary

Issues:
Admissibility of Modvat credit for gunny bags with handwritten serial numbers on the invoice.

Analysis:
The appeal involved the admissibility of Modvat credit for gunny bags received with handwritten serial numbers on the invoice, not meeting the pre-printing requirement under Rule 52A of the Central Excise Rules, 1944. The Asstt. Commissioner and the Commissioner of Central Excise (Appeals) held that non-compliance with the mandatory pre-printing requirement rendered the invoice invalid for claiming Modvat credit.

The appellant argued that the substantive benefit of Modvat credit should not be denied due to a procedural lapse of handwritten serial numbers. The appellant relied on Tribunal decisions emphasizing that Modvat credit should not be denied based on the format of the serial number on the invoice.

However, the respondent contended that Rule 52A(6) mandated each invoice to bear a printed serial number for the entire financial year, emphasizing the importance of this requirement for availing Modvat credit. The respondent cited Tribunal decisions highlighting the mandatory nature of pre-printed serial numbers for invoices.

The Tribunal analyzed the legislative intent behind Rule 52A, emphasizing the significance of the printed serial number requirement for invoices. The Tribunal referred to Circulars issued by the Central Board of Excise & Customs underscoring the importance of printed serial numbers for the whole financial year.

The Tribunal referenced its previous decision in the case of M/s. Derby Textiles Ltd., which held that rubber-stamped serial numbers did not meet the requirement of a printed serial number running for the entire financial year, as mandated by the law. The Tribunal differentiated between pre-printing and marking in the context of Rule 57GG of the Rules.

Additionally, the Tribunal considered the Larger Bench decisions, which clarified that the provisions related to invoices and Modvat credit were mandatory in nature, distinguishing between procedural and substantive conditions. The Tribunal agreed with the ld. Commissioner of Central Excise (Appeals) and rejected the appeal, affirming the denial of Modvat credit due to the non-compliance with the pre-printed serial number requirement on the invoice.

In conclusion, the Tribunal upheld the decision to deny Modvat credit based on the non-compliance with the mandatory pre-printing requirement of serial numbers on the invoices, as stipulated under Rule 52A of the Central Excise Rules, 1944.