1998 (8) TMI 201 - AT - Central Excise

Summary

Issues: Violation of procedures in goods movement, Incorrect Modvat credit availed, Non-production of prescribed duty paying documents.

The judgment involved a case where the Commissioner (Appeals) found that procedures were violated in the movement of goods, leading to the incorrect availment of Modvat credit due to the non-production of prescribed duty paying documents. The dispute arose when a company received Styrene Monomer from a trading company on a loan basis but failed to return the material, resulting in the trading company issuing invoices to the receiving company. The Department alleged that the Modvat credit was wrongly claimed as the goods moved without valid documents, and the duty payment evidence was not provided upon receipt of goods. The Asstt. Commissioner initially allowed the credit, but the Department appealed, arguing against the lack of accompanying duty documents with the goods.

The Appellant's counsel argued that the delay in receiving the raw material led to the loan arrangement, and subsequent invoices from the trading company were produced after the material receipt. Citing precedents, the counsel contended that Modvat credit cannot be denied solely based on the absence of duty documents with the inputs at the time of receipt. Referring to previous tribunal decisions, the counsel emphasized that the subsequent production of duty documents within a reasonable timeframe should validate the credit claim, even if not initially accompanied by the goods.

The Respondent's representative highlighted the absence of proper record-keeping at the time of goods receipt, indicating a lack of documentation regarding duty payment. The Respondent argued that the prescribed duty paying document, the triplicate copy of the Bill of Entry, was crucial for claiming Modvat credit, which was not presented in this case. The Respondent emphasized that the original duty paying document was not produced, leading to the rejection of the Appellant's claim by the Commissioner (Appeals).

Upon review, the Tribunal found that the Appellant failed to provide the necessary triplicate copy of the Bill of Entry, which was the specified document for claiming Modvat credit. As the trading company was not the manufacturer of the material, the triplicate copy was essential for credit eligibility. The Tribunal agreed with the Commissioner (Appeals) that the prescribed duty paying documents were not produced, affirming the rejection of the appeal. Consequently, the Tribunal upheld the impugned order, denying the appeal and maintaining the decision against the Appellant.