1997 (11) TMI 324 - AT - Central Excise

Summary

Issues:
1. Admissibility of Modvat credit based on a reconstructed triplicate copy of the Bill of Entry.
2. Claim for dispensing with pre-deposit of duty due to incurred losses by the applicant.
3. Opposing views on allowing Modvat credit on a reconstructed copy of the Bill of Entry.

Admissibility of Modvat Credit:
The case involved the admissibility of Modvat credit based on a reconstructed triplicate copy of the Bill of Entry. The appellant, an importer, had taken Modvat credit but lost the original triplicate copy due to office changes. The appellant reconstructed the triplicate copy, authenticated by Customs, and submitted it with RT-12 Returns. The Department contended that Modvat credit based on a reconstructed copy was inadmissible post a rule change on 10-3-1995. The appellant argued that previous Tribunal decisions allowed Modvat credit on photocopies with an indemnity bond. The appellant's counsel cited relevant Trade Notices and decisions supporting their claim. The Tribunal considered the goods' receipt and duty payment as crucial, ultimately directing a deposit of Rs. 2 lakh, considering the loss incurred and case law.

Pre-Deposit of Duty Due to Losses:
The appellant also sought dispensation of pre-deposit due to incurring a substantial loss of Rs. 13 crores in 1996-97, supported by the Balance Sheet. The appellant's counsel argued that further pre-deposit would cause undue hardship due to the significant loss, preventing dividend payments. The Tribunal acknowledged the substantial loss but directed a deposit of Rs. 2 lakh, considering all circumstances. The appellant had already deposited Rs. 2,16,450 in response to a detention order, which the Tribunal agreed to adjust against the directed deposit, ensuring it remained until the appeal's finalization.

Opposing Views on Modvat Credit:
The JDR opposed dispensing with pre-deposit, emphasizing that Modvat credit required a triplicate copy of the Bill of Entry during the relevant period. The JDR highlighted the absence of a rule allowing credit based on reconstructed copies, unlike for invoices. The Tribunal noted the contentious issue, citing the rule change making the triplicate copy mandatory for Modvat credit post 10-3-1995. Despite the appellant's arguments and past Tribunal decisions, the Tribunal directed the deposit, considering the prevailing rules and the appellant's loss. The Tribunal set aside the detention order and allowed adjustment of the already deposited amount, with the case listed for further hearing, ensuring the balance amount's stay during the appeal's pendency.