2000 (10) TMI 697 - AT - Central Excise

Summary

Issues:
1. Incorrect Excise Duty shown on invoices.
2. Validity of Modvat credit availed by the appellants.
3. Proper issuance of duty paid documents.
4. Imposition of penalty under Rule 173Q.

Analysis:

1. The appellants, dealers of iron and steel products, received H.R. Coils with incorrect Excise Duty shown on the invoices. Upon realizing the error, they availed Modvat credit by applying the correct rates of duty. The manufacturer issued a new set of invoices canceling the earlier ones. The Asst. Commissioner imposed a penalty under Rule 173Q, stating that the supplementary invoices were not proper duty paid documents as they did not accompany the goods, and the appellants contravened Rules 57G and 57GG.

2. The Commissioner (Appeals) dismissed the party's appeal, emphasizing that the original and supplementary invoices did not meet the requirements for valid invoices under Rule 57(2)(A). Even if the appellants' facts were correct, the invoices did not satisfy the conditions for modvatable invoices under Rule 174 for iron and steel products. The issue of Modvat credit availed by the appellants was crucial in this context.

3. Upon hearing arguments from both sides, the judge noted that the appellants received goods with incorrect duty details, rectified by new invoices from the manufacturer. The appellants availed the correct Modvat credit, duly certified by the Central Excise Officer. The judge highlighted the extraordinary circumstances and advised against a hyper-technical interpretation of the rules by lower authorities. Since the appellants did not exceed the admissible Modvat credit, the penalty imposition lacked grounds, leading to its reversal.

4. The judgment ultimately set aside the penalty imposed under Rule 173Q, emphasizing the correct availing of Modvat credit by the appellants despite initial discrepancies in the duty details on the invoices. The judge's decision focused on the factual circumstances and adherence to the rules without exceeding the permissible credit limits, leading to the allowance of the appeal.