1999 (12) TMI 246 - AT - Central Excise

Summary

Issues:
1. Validity of Modvat credit on steel tubes for HDPE/PP woven bags manufacturing.
2. Acceptability of invoices without pre-printed numbers for Modvat credit.

Analysis:

Issue 1: Validity of Modvat credit on steel tubes
The case involved the appellant, engaged in manufacturing HDPE/PP woven bags, availing Modvat credit for central excise duty paid on steel tubes. The Department disputed this credit, contending that steel tubes were not capital goods under Rule 57Q of the Central Excise Rules. The Deputy Commissioner disallowed the credit, upheld by the Commissioner of Central Excise (Appeals). The appellant argued that steel tubes were essential for the manufacturing process, being part of the winding machine used to convert tapes into woven fabrics. The Tribunal agreed, emphasizing the crucial role of steel tubes in the manufacturing process. The lower authorities' failure to recognize this led to setting aside their orders and allowing the appeal.

Issue 2: Acceptability of invoices without pre-printed numbers
Regarding the validity of invoices without pre-printed numbers for Modvat credit, the appellant cited a Tribunal decision where such invoices were accepted if duty payment was certified. In this case, the department did not dispute duty payment or goods utilization. The Tribunal found that computer-printed serial numbers on the invoices sufficed under Rule 52A of the Central Excise Rules, especially in the context of evolving documentation methods. Consequently, the adjudicating authority's rejection of the invoices as valid duty paying documents for Modvat credit was deemed unsustainable. As a result, both lower authorities' orders were set aside, and the appeal was allowed.

In conclusion, the Tribunal ruled in favor of the appellant, upholding the validity of Modvat credit on steel tubes and accepting invoices without pre-printed numbers for the credit. The decision highlighted the importance of recognizing the essential role of components in the manufacturing process and adapting to modern documentation practices within the legal framework.