1996 (11) TMI 148 - AT - Central Excise

Summary

Issues: Validity of original invoices for Modvat credit during a specific period.

Analysis:
The case involved a determination of whether original invoices issued between 20-4-1994 to 4-5-1994 were valid documents for claiming Modvat credit. The Commissioner of Central Excise & Customs (Appeals) modified the Additional Collector's order, allowing a credit of Rs. 65,400/- for specific invoices. The appellants, engaged in manufacturing steel tubes and pipes, were accused of wrongly claiming credit based on 11 original invoices. The department issued a show cause notice seeking justification for the credit taken. The Additional Collector disallowed Rs. 65,400/- credit for certain invoices, leading to an appeal by the respondents before the Commissioner (Appeals).

The appellant's representative argued that credit could only be taken based on the duplicate copy of the invoice as per Rule 52A of the Central Excise Rules. They contended that the credit taken on original invoices before the relevant notification was invalid. On the other hand, the respondents' counsel stated that the credit was claimed during the specified period, and due to the loss of the transporter copy, they relied on the original invoice. They cited the Government's Notification 23/94-C.E. (N.T.), issued on 20-5-1994, allowing credit based on original invoices in case of duplicate copy loss.

After considering both parties' submissions, the Tribunal noted that the respondents had taken credit based on original invoices, with no dispute regarding goods receipt or utilization. The Tribunal highlighted the transitional period of the new credit system introduced from 1-4-1994 and the subsequent clarificatory notification allowing credit based on original invoices. Referring to a previous case, the Tribunal emphasized the objective of preventing misuse of Modvat credit and concluded that the notification had a clarificatory nature with retrospective effect.

Ultimately, the Tribunal upheld the Commissioner (Appeals)'s decision, affirming that the respondents rightfully claimed Modvat credit based on original invoices. The Tribunal considered the notification clarificatory and applicable to the case, given the transitional period and the absence of misuse in claiming the credit. Thus, the appeal by the department was rejected, and the impugned order was upheld.