1998 (5) TMI 209 - AT - Central Excise

Summary

Issues:
1. Whether Modvat credit can be extended based on documents not prescribed under Rule 57G?
2. Whether Modvat credit can be extended on unspecified documents against the spirit of Rule 57G?

Issue 1:
The applications sought reference to the jurisdictional High Court regarding the correctness of extending Modvat credit based on non-prescribed documents under Rule 57G. The dispute involved multiple units owned by the same company availing Modvat credit on specified inputs for manufacturing specific finished products under Rule 57A. The department contended that the invoices endorsed for transfer between company units were not covered by the prescribed documents under Rule 57G. The Asst. Collector ruled against the assessee, but the Commissioner (Appeals) favored the assessee. The Tribunal relied on a previous decision involving Larsen & Toubro Ltd., where Modvat credit was allowed for endorsed invoices in similar circumstances. The Tribunal consistently upheld this view in various cases, including the present respondent's appeals, resulting in the dismissal of department appeals and reference applications.

Issue 2:
The second issue revolved around whether Modvat credit could be extended on unspecified documents, contrary to the essence of Rule 57G. The department argued that the endorsed invoices were not recognized as prescribed documents under Rule 57G. However, the Tribunal maintained that invoices issued under Rule 52A, even if endorsed for transfer between company units, remained valid documents for Modvat credit under Rule 57G. The Tribunal's decision was based on the principle that the consignment transfer within the same company did not invalidate the original invoice's legitimacy. The Tribunal's consistent stance in various cases supported the admissibility of endorsed invoices for Modvat credit, leading to the dismissal of department appeals and reference applications against the same assessee.

In conclusion, the Tribunal dismissed the applications seeking reference to the High Court, stating that the questions of law proposed did not warrant consideration based on the established precedents and interpretations of Rule 57G. The Tribunal's decisions in similar cases reinforced the acceptance of endorsed invoices for Modvat credit within the same company, aligning with the principles upheld in previous judgments.