2005 (8) TMI 180 - AT - Central Excise

Summary

Issues:
1. Validity of Modvat credit on inputs based on endorsed invoices.
2. Denial of credit of CVD on imported inputs due to lack of required documentation.

Analysis:

Issue 1: Validity of Modvat credit on inputs based on endorsed invoices
The appellants took Modvat credit on inputs using invoices endorsed by their depot, which were issued by the manufacturer after 1-4-1994. The Revenue contended that under the Tribunal's Larger Bench decision in Balmer & Lawrie Co. Ltd. v Commissioner of Central Excise, invoices issued by manufacturers under Rule 52A of the Central Excise Act could not be endorsed. However, it was found that the inputs covered by the invoices were supplied by the manufacturer, who transferred them to their depot in Pondicherry, and the depot then supplied the goods to the appellants by endorsing the invoices. The Tribunal noted that the depot functioned as part of the manufacturer, and the endorsements made on the invoices were inconsequential as they were made by the manufacturers themselves. Therefore, the appellants were entitled to Modvat credit on the inputs based on valid manufacturer's invoices, and the denial of credit by the Revenue was unjustified.

Issue 2: Denial of credit of CVD on imported inputs
The assessee also claimed credit of CVD on imported inputs using photocopies of Bills of Entry, instead of the triplicate Bill of Entry required for Modvat purposes at that time. As the assessee could not produce the necessary document, the lower appellate authority rightly denied the credit. The Tribunal found no valid ground to interfere with this decision, and no justification was provided in the appeal against the denial of CVD credit. Consequently, the denial of CVD credit was upheld, and the Modvat credits on other inputs were allowed to the assessee.

In conclusion, the Tribunal allowed the Modvat credits on inputs based on valid manufacturer's invoices but upheld the denial of CVD credit on imported inputs due to insufficient documentation. The impugned order was modified accordingly, disposing of both appeals in favor of the assessee.