1998 (6) TMI 333 - AT - Central Excise

Summary

Issues:
Modvat credit availed on original invoice before the amendment to Rule 57G - Whether credit correctly taken?
Requirement of marking invoices as 'Original', 'Duplicate', 'Triplicate' - Applicability before 19-1-1995.
Validity of Modvat credit taken on original invoices before the introduction of marking requirement.

Analysis:
The Appellants challenged the Order of the Commissioner Appeals, contending that Modvat credit taken on the original invoice was correct despite the Department's allegation that credit should have been taken on the duplicate invoice as per Rule 52A. The Appellants argued that since they availed the credit before the amendment to Rule 57G, which prescribed marking copies as 'Original', 'Duplicate', 'Triplicate', they were not bound by this requirement. The ld. Consultant cited Trade Notices from various Collectorates supporting their stance that Modvat credit could be taken on the original invoices.

After hearing both sides, the Tribunal decided to proceed with the appeal without pre-deposit due to the simplicity of the issue. The ld. Consultant emphasized that the requirement of marking invoices as 'Original', 'Duplicate', 'Triplicate' only came into effect from 19-1-1995, and prior to that, no such obligation existed. The Tribunal considered the Trade Notices issued by Collectorates, which unequivocally stated that Modvat credit could be claimed based on the original invoices. The ld. Consultant argued that when read with Notification No. 2/95-C.E. (N.T.), dated 19-1-1995, it was evident that Modvat credit was permissible on original invoices.

On the other hand, the Respondent Commissioner contended that Rule 52A mandated marking copies of invoices and that this requirement was fundamental. The Respondent highlighted that the Appellants failed to produce the duplicate invoice during the proceedings, leading to the denial of Modvat credit. However, upon careful consideration, the Tribunal noted that the marking requirement for invoices was introduced only from 19-1-1995 through Notification No. 2/95-C.E. (N.T.). The Tribunal observed that the legal position remained consistent from 4th July, 1994, to 18th January, 1995, as confirmed by the Trade Notices issued by various Collectorates. The Tribunal relied on the clarifications provided in the Trade Notices, emphasizing that Modvat credit could indeed be availed based on the original invoices.

In conclusion, the Tribunal held that the Appellants had correctly claimed Modvat credit on the original invoices in accordance with the prevailing legal provisions before the marking requirement was introduced. The appeal was allowed, granting any consequential relief to the Appellant as per the law.