1999 (1) TMI 218 - AT - Central Excise

Summary

Issues: Modvat credit disallowed due to procedural grounds, receipt of consignment in two spells under the same invoice.

Analysis:
1. The first issue pertains to the disallowance of Modvat credit based on procedural grounds. The appellant argued that the denial was unjust as their factory was located remotely, leading to the material being transported in two journeys. The appellant highlighted that the jurisdictional Superintendent had inspected and approved the documents without any objections, indicating compliance with duty payment requirements. The appellant emphasized that substantive benefits should not be denied due to minor procedural issues, citing previous Tribunal decisions supporting their stance. The appellant's counsel contended that the receipt of inputs in two installments under the same invoice should not hinder Modvat credit eligibility, especially when proportionate credit was availed upon the first installment. The Tribunal agreed with the appellant, emphasizing that procedural irregularities should not obstruct credit entitlement, ultimately allowing the appeal.

2. The second issue concerns the receipt of consignments in two spells under the cover of the same invoice. The Revenue contended that Rule 57GG necessitates input-material to be accompanied by the duty paying document, which was not fully complied with in this case. The Revenue also raised concerns about the lack of identification marks on goods and invoices to correlate inputs accurately. Additionally, the Revenue highlighted the C.B.E.C. Circular requiring individual invoices for split consignments. Despite these arguments, the Tribunal found that the denial of Modvat credit was solely based on technical and procedural aspects. The Tribunal clarified that receiving consignments in two spells within a short timeframe should not be a sufficient reason to disallow the credit, as long as duty payment requirements were met. Relying on precedent and the principle that minor procedural issues should not hinder credit entitlement, the Tribunal overturned the decision and granted relief to the appellants.

In conclusion, the judgment by the Appellate Tribunal CEGAT, CALCUTTA addressed the issues of Modvat credit disallowance due to procedural grounds and the receipt of consignments in two spells under the same invoice. The Tribunal emphasized that minor procedural irregularities should not deprive the assessee of availing credit benefits, ultimately allowing the appeal and providing consequential reliefs to the appellants.