1999 (3) TMI 165 - AT - Central Excise

Summary

Issues: Validity of invoice for Modvat credit & Limitation of show cause notice

Validity of Invoice for Modvat Credit:
The appeal before the Appellate Tribunal CEGAT, Mumbai revolves around the validity of invoices issued by M/s. Terene Fibre India Ltd. for consignments of polyester fibre received by the appellant. The primary issue is whether these invoices are valid documents for claiming Modvat credit on the duty paid for the fibre. The appellant argues that the goods were ordered through an agent of Reliance Textile Industries Ltd., who got the fibre manufactured by Terene as a job worker. The appellant was shown as the consignee in the invoices, which, according to the appellant, satisfy the requirements specified under Rule 57G for claiming credit. On the other hand, the Departmental Representative questions the validity of the arrangement, citing delays in payment, additional charges paid, and non-alignment with the Modvat scheme. The Commissioner also raises concerns about documentation, suppression, and misrepresentation, supported by a previous Tribunal decision. The Tribunal, after examining the commercial arrangement details provided by the appellant, finds the invoices in question meet the criteria under Rule 57G, irrespective of the indirect ordering process through the agent. The Tribunal emphasizes that additional payments and non-disclosure of certain transaction details do not impact the eligibility of Modvat credit, as there is no obligation to disclose such information to the department unless there is suppression or misrepresentation, which are mutually exclusive.

Limitation of Show Cause Notice:
Another aspect of the appeal involves the limitation period concerning a show cause notice issued under Rule 57-I for the recovery of credit taken between June and September 1994. The appellant successfully argues that the notice is time-barred, as the validity of the invoices for Modvat credit has been upheld, leading to the allowance of the appeal on both limitation and merits. The Tribunal sets aside the impugned order in favor of the appellant, highlighting the distinction from a previous case cited by the Departmental Representative, where the invoice chain and parties involved differed significantly from the present case.

In conclusion, the Tribunal's decision favors the appellant, confirming the validity of the invoices for claiming Modvat credit and ruling in favor of the appellant on the limitation issue, ultimately allowing the appeal and overturning the initial order.