1997 (12) TMI 266 - AT - Central Excise

Summary

Issues: Admissibility of original invoices as duty paying documents for Modvat credit post-amendment of Rule 52A

The judgment addresses the issue of the admissibility of original invoices as duty paying documents for Modvat credit after the amendment of Rule 52A of the Central Excise Rules. The appellants, who manufactured instant soluble coffee, noodles, and condensed milk, availed Modvat credit based on original invoices issued by manufacturers. The Collector disallowed the Modvat credit and imposed a penalty, leading to the appeal. The main contention was whether original invoices were valid duty paying documents post-amendment.

The appellants argued that the denial of credit was based on a technicality regarding the type of invoice copies used, emphasizing that the inputs were used for manufacturing final products. They referred to relevant notifications recognizing invoices issued by manufacturers as valid documents for Modvat credit without distinguishing between original and duplicate copies. On the other hand, the Respondents argued that Rule 52A specified the use of duplicate copies for claiming Modvat credit under Rule 57G, indicating that the valid document for credit was the duplicate copy.

Upon consideration, the Tribunal observed that Rule 52A referred to different copies of invoices, with the duplicate copy specified for Modvat credit under Rule 57G. The proviso to Rule 57G(2) mentioned invoices issued under Rule 52A as recognized documents for credit. Therefore, the Tribunal concluded that the procedure and conditions under Rule 52A governed the validity of invoices for Modvat credit. As a result, the impugned order disallowing Modvat credit based on original copies of invoices was upheld.

Additionally, the Tribunal addressed the appellants' argument regarding a subsequent notification allowing credit on invoices and other documents, clarifying that the allowance was related to the origin of inputs rather than the type of invoice document. Consequently, the Tribunal found no legal infirmity in the impugned order and rejected the appeal, upholding the decision to disallow the Modvat credit based on original invoices.