1998 (5) TMI 246 - AT - Central Excise

Summary

Issues: Modvat credit eligibility based on invoice markings under Rule 52A and Rule 57GG.

In this case, the issue revolved around the eligibility of Modvat credit based on the markings on the invoices issued by M/s. SAIL under Rule 52A and Rule 57GG. The Appellate Tribunal considered whether the invoices, marked as "Customer/Transporter," qualified for Modvat credit under the relevant rules. The Assistant Collector had initially denied Modvat credit, stating that the invoices did not meet the requirements of Rule 52A. However, the Collector (Appeals) granted relief to the assessees, noting the absence of specific conditions at the material time in Rule 57GG regarding the marking of invoices. The Revenue appealed this decision, citing a Board's Circular directing the application of Rule 52A provisions to invoices under Rule 57GG.

Upon hearing arguments from both parties, the Tribunal analyzed the provisions of Rule 52A and Rule 57GG. It noted that Rule 52A mandated the marking of duplicate invoices for transporters issued by manufacturers from their factories or warehouses for Modvat credit under Rule 57G or Rule 57T. However, the invoices in question were issued from SAIL's stock yards, not factories or warehouses, thereby exempting them from Rule 52A requirements.

The Respondent's advocate argued that the stock yards were registered as dealers under Rule 174, making Rule 57GG applicable. Rule 57GG required registered persons to issue invoices as prescribed by the CBEC or the Collector of Customs & Central Excise, without specifying how the copies should be marked for credit. The Tribunal examined a circular cited by the Revenue, which purportedly applied Rule 57GG's sub-rule (4). However, it found that the circular overstepped its authority by incorporating provisions from Rule 52A, leading to the introduction of sub-rule 4(a) at a later stage.

Ultimately, the Tribunal held that the circular lacked legal authority, the stock yards did not qualify as factories or warehouses, and Rule 57GG did not provide specific directions on invoice markings for Modvat credit. Consequently, it upheld the Collector's decision, dismissing the Revenue's appeal. The judgment emphasized the importance of adhering to the specific requirements of the relevant rules for claiming Modvat credit and highlighted the limitations of circulars in extending rule provisions beyond their intended scope.