2001 (2) TMI 384 - AT - Central Excise

Summary

Issues involved:
Whether Modvat credit was eligible based on invoices not in prescribed colour code.

Analysis:
The appeal involved the question of whether Modvat credit was rightfully denied to M/s. Siddharath Petro Products due to invoices not being in the prescribed pink colour as required by Notification No. 23/95 dated 3-5-1995. The Assistant Commissioner disallowed the credit, which was upheld by the Commissioner (Appeal) citing a previous decision. The appellant argued that various judgments have held that if inputs have suffered duty and were used in final products without suspicion of fraud, Modvat credit cannot be denied. They also contended that the requirement of pink colour invoices came into effect from 1-8-1995, and as the inputs were received in August and September 1995, it was a transitional period, making the credit eligible. Reference was made to cases where Modvat credit was allowed despite non-compliance with colour requirements.

The respondent, however, argued that Notification No. 23/95 was issued on 30-5-1995, providing a two-month period for compliance before coming into effect on 1-8-1995. They emphasized the importance of adhering to the prescribed rules for availing Modvat credit, as highlighted in previous judgments. The respondent distinguished cases cited by the appellant, asserting that the specific circumstances were not applicable to the present matter. The respondent also highlighted the necessity of following the prescribed rules regarding the colour of invoices for claiming Modvat credit.

Upon considering the arguments, the Tribunal referred to the Avis Electronics case, which emphasized the importance of complying with the rules as directed. It was noted that the law required the duplicate invoice, for claiming Modvat credit, to be in pink colour as per the Notification. As the invoices in question were not in pink colour during the relevant period, the Tribunal found no justification to overturn the decision denying the Modvat credit. The Tribunal rejected the appeal, emphasizing that individual dealers could not choose when to implement the colour scheme specified by the Notification, and compliance was mandatory for claiming the credit. The Tribunal upheld the denial of Modvat credit due to non-compliance with the prescribed colour code, as per the rules in force.