1997 (1) TMI 233 - AT - Central Excise

Summary

Issues:
1. Availment of Modvat credit under Central Excise Rules.
2. Validity of trader's invoice for Modvat credit.
3. Interpretation of rules regarding endorsement on documents for Modvat credit.
4. Dispute over rubber stamp entries on trader's invoice.
5. Decision on the entitlement to Modvat credit.

Analysis:
1. The appellants, engaged in manufacturing Tractor Parts under Chapter 87 of the Central Excise Tariff Act, availed Modvat credit of duty paid on inputs under Rule 57A of the Central Excise Rules, 1944. The issue arose when the department found discrepancies in the documents used for claiming Modvat credit, leading to a show cause notice being issued to each appellant separately.

2. The department contended that the trader's invoices used by the appellants did not contain the required particulars as per relevant notifications, rendering them invalid for claiming Modvat credit. Both the Commissioner (Appeals) and the Additional Collector upheld this view, stating that the invoices lacked full particulars of duty paid by the original manufacturer, thus disqualifying them from being valid documents for Modvat credit.

3. The appellants argued that the use of a rubber stamp on the trader's invoice, containing duty payment details, was valid based on a precedent set by the Tribunal in another case. They maintained that the details filled through rubber stamp were verifiable and accurate, as they matched the original invoice issued by the manufacturer, Steel Authority of India. The appellants contended that there was no legal prohibition against using a rubber stamp for efficiency in documenting details.

4. Upon careful consideration, the Judge conducted a physical verification of the documents and found that the rubber stamp entries on the trader's invoices were legitimate. As long as the details filled in the rubber stamp were correct and aligned with the original challan-cum-invoice from the manufacturer, the Judge concluded that the appellants were entitled to the Modvat credit. The Judge set aside the impugned order and remanded the matter to the original authority for formal verification, directing the grant of Modvat credit if the details on the trader's invoice matched those on the manufacturer's invoice.

5. In the final decision, both appeals were allowed by way of remand to the Assistant Commissioner, affirming the appellants' entitlement to the Modvat credit subject to verification of details on the trader's invoice against the original manufacturer's invoice. The judgment emphasized the importance of accuracy and verifiability in claiming Modvat credit under the Central Excise Rules.