1999 (5) TMI 144 - AT - Central Excise

Summary

Issues:
1. Denial of Modvat credit of Rs. 46,110
2. Imposition of a penalty of Rs. 500

Analysis:

Issue 1: Denial of Modvat credit
The appellant contested the denial of Modvat credit due to an incorrect delivery address on an invoice issued by a raw material supplier. The consultant argued that the correct address was provided in the delivery challan, and the goods were received at the intended factory location. The supplier confirmed the error in the address and provided a clarification letter. The Department alleged that the goods were delivered to the address on the invoice, ignoring the delivery challan's correct address. The Tribunal noted that minor variations in invoices should not prejudice the manufacturer claiming Modvat credit. Referring to a relevant circular, the Tribunal emphasized that such minor discrepancies should be overlooked. As the goods were properly recorded in registers and their utilization was not questioned, the denial of Modvat credit was deemed unjustified, and the appeal was allowed.

Issue 2: Imposition of penalty
The penalty of Rs. 500 was imposed alongside the denial of Modvat credit. However, since the denial of Modvat credit was found to be unjustified and was overturned, the penalty was also set aside. With the appeal being allowed, the stay petition was consequently disposed of as well.

In conclusion, the Tribunal ruled in favor of the appellant, overturning the denial of Modvat credit and the imposed penalty. The decision was based on the clarification provided by the raw material supplier, the proper recording of goods in registers, and the insignificance of minor address variations on invoices for claiming Modvat credit.