1998 (1) TMI 210 - AT - Central Excise

Summary

Issues:
1. Admissibility of Modvat credit based on the original or carbon copy of duty paying documents.
2. Interpretation of Rule 57G of the Central Excise Rules regarding Modvat credit.
3. Compliance with legal requirements for submission of original duty paying documents under Rule 57G(4).

Analysis:
The Appellate Tribunal considered the appeal challenging the Commissioner (Appeals) order regarding the admissibility of Modvat credit based on the original or carbon copy of duty paying documents. The Department contended that under Rule 57G of the Central Excise Rules, Modvat credit is permissible only with the original Duty Paying Documents. The Appellants argued that they were purchasing raw materials from a supplier who issued only carbon copies of the challan, following a long-standing practice. They cited a Tribunal decision emphasizing substantial compliance with the law and Trade Notice No. 53 (31- Misc)/86, allowing a certificate on the delivery challan for Modvat credit.

The Tribunal examined the legal requirements under Rule 57G and the submissions from both sides. The Department highlighted a new provision under Rule 57G(4) mandating the submission of original duty paying documents, emphasizing it as a legal requirement to prevent abuse. The Department argued that a carbon copy cannot substitute an original document, and non-compliance with this requirement was not a technical lapse but a legal necessity. The Tribunal found that the specific provision in Rule 57G(4) necessitating original documents for duty payment submission was a legal and mandatory requirement, not a procedural or technical one.

In the final analysis, the Tribunal rejected the appeal, emphasizing that the legal and mandatory nature of the requirement for original duty paying documents under Rule 57G(4) precluded any consideration of technical lapses. The Tribunal concluded that non-compliance with this legal requirement could not be deemed a technical lapse, thereby upholding the decision that Modvat credit based on carbon copies was inadmissible. The appeal was dismissed based on the legal necessity for original documents under Rule 57G(4) for the finalization of assessment, despite arguments of substantial compliance and historical practices.