2003 (3) TMI 245 - AT - Central Excise

Summary

Issues involved:
The issues involved in this case are the validity of Modvat credit based on commercial invoices, the correlation of inputs with duty paid documents, and the acceptability of documents issued by dealers for the grant of Modvat credit.

Validity of Modvat credit based on commercial invoices:
The Commissioner rejected Modvat credit due to discrepancies between the commercial invoice issued by M/s. Madras Suspension Private Ltd. Madurai (MSPL) and the documents received from M/s. Madras Suspension (Karnataka) Pvt. Ltd. (MSKPL). The appellant argued that it is common industry practice for manufacturers to place orders with job workers, and the Tribunal cited precedents where similar situations were deemed valid for Modvat credit.

Correlation of inputs with duty paid documents:
In the case of BEEPEE Coatings Ltd. v. CCE, Vadodara, the Tribunal held that Modvat credit is permissible when inputs are received by job workers with invoices in the name of the customer, endorsed by the customers in favor of the job worker. This correlation of inputs with duty paid documents was considered essential for granting Modvat credit.

Acceptability of documents issued by dealers:
The Tribunal in the case of CCE, Chandigarh v. Prem Industries noted that Modvat credit was taken on challans issued by consignment agents, fulfilling the requirements of relevant circulars. However, the Tribunal also highlighted cases where invoices issued by non-manufacturers or non-registered dealers were deemed invalid for Modvat credit.

Judgment:
After considering arguments from both sides, the Tribunal found that the commercial invoice issued by MSPL was valid as it detailed the goods manufactured by MSKPL on which duty had been paid and were verifiable. The Tribunal emphasized the importance of matching documents and inputs for the grant of Modvat credit, following precedents where such verifiability was upheld. Consequently, the impugned order was set aside, and the appeals were allowed.