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TMI Blog2006 (2) TMI 339X X X X Extracts X X X X X X X X Extracts X X X X ..... t rules. It was found that they had availed credit on the invoices which were invalid. M/s. Bellary Steel and Alloys Ltd. (BSAL) who issued the invoices to the appellants had misdeclared the description of the goods. In the Modvat invoices the description given is 100 x 100 mm whereas the actual goods received by the appellants were billets of 125 x 125 mm only. The supplier actually purchased the billets of 125 x 125 mm from M/s. Rashtriya Ispat Nigam Ltd., (RINL) Visakhapatnam. The goods were transported directly to the appellants factory without going to the original purchaser BSAL. BSAL were showing the receipt of their goods in their factory and availed credit in their records. Subsequently they raised fictitious invoices showing clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of duplicate copies of invoices payment was made to BSAL though proper banking channels namely through cheque or through letters of credit. Even though documentary evidence was filed before the Commissioner, he has not considered the same. (3) In terms of Rule 173Q(bb) read with explanation given thereunder that a person availing of credit of duty on inputs received by him shall be deemed to have taken reasonable steps if he satisfies himself about the identity and address of the manufacturers or supplier, as the case may be, issuing the invoice or any other document approved under these rules evidencing the payment of excise duty. In the instant case, the appellants have been regularly having dealings with BSAL during the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re has been exonerated and their appeals have been allowed, it is not correct to deny Modvat credit to the appellants for no fault of theirs. (5) In view of the above submissions, the learned Advocates requested the Bench to allow the appeals. The learned SDR reiterated the orders of the lower authorities and relied on the Larger Bench decision in the case of Balmer Lawrie Company v. CCE, Kanpur - 2000 (116) E.L.T. 364 (T) wherein it is held that Modvat cannot be allowed on invalid documents. In fact, this point has been elaborately dealt with in the above decision. We have gone through the records of the case carefully. Revenue proceeded against the appellants on the ground that they had availed Modvat credit on the basis of inva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Balmer Lawrie decision has clearly laid down that Modvat cannot be availed on invalid documents, but taking into account, the peculiar circumstances of this case, we find that the appellants have not committed any contumacious act warranting penalty. The duty paid nature of the impugned goods is not in doubt. The receipt of the impugned goods in the factory of the appellants is also not in doubt. The explanation under Rule 173(bb) cited by the learned Advocate is also very relevant. In any case, there is no justification for invoking longer period in demanding the credit in respect of the appellants. In these circumstances, we are inclined to allow the appeals with consequential relief. (Pronounced in open Court on 6-2-2006) - - TaxT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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