1997 (10) TMI 129 - AT - Central Excise

Summary

Issues:
1. Denial of Modvat credit on the basis of endorsed invoices.
2. Disallowance of Modvat credit due to improper dealers' invoices.

Analysis:
1. The case involved the denial of Modvat credit amounting to Rs. 58,007.00 to the appellants as the credit was availed based on an invoice not in their name but endorsed by a third party. The authorities contended that Modvat credit could only be availed as per the documents prescribed under Notification No. 15/94-C.E. (N.T.). The appellants argued that the recent switch to invoices from gate passes caused confusion, and the endorsed invoice issue was in line with the previous practice. However, the judge noted that the prescribed documents for Modvat credit did not include endorsed invoices. The judge cited the Notification No. 15/94 and emphasized that only specific documents, like invoices issued by authorized entities, could be used for availing Modvat credit. The judge referred to a previous tribunal decision supporting this view and upheld the denial of Modvat credit based on endorsed invoices.

2. Additionally, the appellants faced disallowance of Modvat credit on other grounds related to the dealers' invoices. The judge found that while the show cause notice highlighted certain deficiencies in the invoices, the disallowance by the Assistant Commissioner extended beyond the notice. The judge acknowledged that the defects in the invoices were minor and rectifiable. Referring to tribunal decisions, the judge stated that credit taken on original invoices should not be disallowed. However, due to discrepancies regarding the date of a duplicate invoice copy and the Assistant Commissioner's overreach, this part of the order was set aside. The judge remanded the matter for a reevaluation in line with the latest tribunal judgments.

In conclusion, the judgment addressed the issues of Modvat credit denial based on endorsed invoices and improper dealers' invoices. The decision upheld the denial of credit for endorsed invoices but set aside the disallowance related to dealers' invoices for further review. The judge emphasized adherence to prescribed documents for availing Modvat credit and the need for proper documentation in line with relevant notifications and tribunal precedents.