2000 (8) TMI 766 - AT - Central Excise

Summary

Issues:
1. Interpretation of Board's circular on availing Modvat credit.
2. Retrospective effect of procedural directions in Board's circulars.
3. Validity of Modvat credit denial based on destination shown in invoice.

Analysis:
1. The first issue in this case involves the interpretation of the Board's circular regarding the admissibility of Modvat credit. The Commissioner (Appeals) allowed the credit based on Trade Notice No. 60/96 and Ministry's circular No. 211/45/96-CX, which clarified that credit should not be denied if the consignment is received at the factory despite the invoice being in the name of the registered office. The Commissioner challenged this decision, arguing that the Board's circular should have prospective, not retrospective, effect.

2. The second issue addressed the retrospective effect of procedural directions in the Board's circulars. The consultant for the respondent cited judgments in support of the binding nature of Board's circulars, emphasizing that procedural directions have retrospective effect. Citing cases like Ranadey Micro Nutrients and Usha Martin, it was argued that the circulars are binding on authorities. The consultant also referred to the Andhra Pradesh High Court case of Suresh Agrawal v. CCE to support the argument that procedural directions have retrospective effect.

3. The final issue focused on the validity of denying Modvat credit based on the destination shown in the invoice. The consultant contended that the Board's circulars are binding and that the destination shown in the invoice being different from the factory address should not be a ground for rejecting Modvat credit. It was highlighted that the factory address was indeed indicated in the invoices, and there was no evidence that the imported items did not reach the factory or were not utilized. Therefore, the grounds raised by the Revenue for denying the credit were deemed invalid, and the appeal was rejected.

In conclusion, the judgment upheld the admissibility of Modvat credit based on the Board's circulars, emphasizing their retrospective effect and the importance of procedural directions. The decision clarified that the destination shown in the invoice did not warrant denial of credit if the consignment reached the factory and was utilized, even if the invoice was initially in the name of the registered office.