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TMI Blog2012 (4) TMI 254X X X X Extracts X X X X X X X X Extracts X X X X ..... le 57G of the Rules?" Briefly stated the facts giving rise to the present appeal are as follows: The respondent-assessee, which is a public limited company, is engaged in the business of manufacture and sale of Aluminium and its products falling under Chapter 76 of the Schedule to the Central Excise Tariff Act, 1985. It availed Modvat credit under Rule 57A/57Q of the Central Excise Rule, 1944, hereinafter referred to as "the Rules". According to the Revenue, the respondent-assessee illegally and irregularly availed Modvat credit to the tune of Rs.6,67,26,672.83. Show cause notices were issued and after considering the reply filed by the respondent-assessee, the Assistant Commissioner, Central Excise Division, Mirzapur passed the orders confirming the aforesaid demand. Feeling aggrieved the respondent-assessee preferred appeals before the Commissioner(Appeals), Customs and Central Excise, Allahabad, who vide order dated 10th February, 2003 accepted the claim of the respondent-assessee to the extent of Rs.5,46,99,628.44. The Commissioner (Appeals), however, disallowed the Modvat credit of Rs.1,20,27,04.39. The respondent-assessee deposited a sum of Rs.1,13,63,610.07 and preferred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tanding Counsel for the Revenue, submitted that under sub-rule (2) of Rule 57G of the Rules production of duplicate copy of the invoice was the only mode prescribed for taking Modvat credit and as admittedly the Modvat credit was availed much prior to 9th February, 1999, the Modvat credit on Fabricated heaters/Fabricated tubes/Crab Assembly was inadmissible and the view to the contrary that it is only a procedural lapse is not correct. According to him, the amendment of the Rules 57G of the Rules vide Notification dated 9th February, 1999 would apply prospectively and, therefore, no benefit can be derived from the aforementioned amendment. He stressed that Modvat credit could be availed only on strict fulfilment of requirements stipulated in Rule 57G of the Rules and not otherwise. He referred to Section 5 of the General Clauses Act, 1897, to press home his plea that an enactment shall come into operation from the prescribed date. In support of his aforesaid plea he has relied upon the following decisions. 1. R.Kapilanath (dead) through L.Rs. vs. Krishna, AIR 2003 SC 565 2. Commissioner of Customs, Bangalore vs. Spice Telecom, Bangalore, 2006-SCC-10 3. Commissioner of Central E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect/lacunae in the process of availing Modvat credit was that the invoice was not marked as 'duplicate'. Rest of the particulars mentioned in that invoice are not in dispute nor its correctness is being disputed by the Revenue. The question before us is as to whether Rule 57 G of the Rules should be taken as mandatory or directory and whether it provides for procedure for availing benefit of Modvat credit or is substantive in nature. For ready reference Rule 52A and Rule 57G of the Rules are reproduced below. 52A. Goods to be delivered on an invoice.-- (1) No excisable goods shall be delivered from a factory or a warehouse except under an invoice signed by the owner of the factory, or his authorised agent: Provided that when the excisable goods, other than those to which the provisions of Chapter VII-A apply, are removed on payment of duty such invoice shall be required to be countersigned by the proper officer. Explanation.--In this rule, and in any other rule, where the term invoice or gate-pass, as the case may be, is used it shall mean-- (i) assessee's own document such as invoice, challans, advice or other document of similar nature generally used for sale or removal of ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsumption; and (ii) the other for clearances for export. (6) Each invoice shall bear a printed serial number running for the whole financial year beginning on the 1st April of each year. Only one invoice book of each type shall be used by a factory for removal of excisable goods at any one time unless otherwise specially permitted by the Commissioner in writing. (7) Each foil of the invoice book shall be authenticated by the owner or working partner or Managing Director/Company Secretary, as the case may be, before being brought into use by the manufacturer. The serial number of the invoice, before being brought into use, shall be intimated to the Assistant Commissioner of Central excise and dated acknowledgement of receipt of such intimation shall be retained by the manufacturer. Provided that the Commissioner may, by a general or special order, exempt an assessee or class of assessees from pre-authentication of each foil of invoice book and from intimating the serial number of the invoice. (8) If any person-- (a) caries or transports excisable goods from a factory or warehouse without a valid invoice, or (b) while carrying or removing such goods from a factory or warehous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said importer provided the said depot or the premises, as the case may be, is registered under Rule 174 and duly authenticated by the proper officer; (j) an invoice issued by a first stage or second stage dealer of imported goods registered under Rule 174 and duty authenticated by the proper officer; (k) duplicate copy of a bill of entry generated on Electronic data Interchange System installed in any Customs or central Excise Commissionerate; (l) a certificate issued by the Superintendent of Central Excise or by the proper officer in the Customs area under Rule 57E; and (m) an invoice issued by a manufacturer of final product under sub-rule (3) of Rule 57F or sub-rule (1) of Rule 57S Explanation.--For the purposes of this section,-- (i) "first stage dealer" means a dealer who purchases the goods directly from-- (a) the manufacturer under the cover of an invoice issued under Rule 52A or Rule 100E or from the depot of the said manufacturer or from any other premises from where the goods are sold by or on behalf of the said manufacturer, under cover of an invoice issued under Rule 57G; or (b) an importer or from the depot of an importer or from the premises of the consignment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particulars of the inputs received during the month and the amount of credit taken. The manufacturer shall also submit original duty paying documents and extracts of Part I and Part II of For R.G. 23A maintained along with the monthly return to the Superintendent of Central Excise, who shall after verifying their genuineness, deface such documents and return the same to the manufacturer: Provided that the Commissioner may, having regard to the nature, variety and extent of production or manufacture or frequency of removals-- (i) fix in relation to any assessee or class of assesses a period shorter than one month for filing the aforesaid return; (ii) permit that the aforesaid return may be filed by the assessee within a period not exceeding twenty-one days after the close of each month: Provided further that in respect of a manufacturer availing of any exemption based on the value or quantity of clearances in a financial year, the provisions of this sub-rule shall have effect in that financial year as if for the expression "month", the expression "quarter" were substituted. (9) Where a manufacturer was, for sufficient reasons, not in a position to make a declaration under sub-r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) in rule 57G, after sub-rule (10), the following sub-rule shall be inserted, namely:- "(11) Credit under sub-rule (2) shall not be denied on the grounds that (i) any of the documents, mentioned in sub-rule (3) does not contain all the particulars required to be contained therein under these rules, if such document contains details of payment of duty, description of the goods, assessable value, name and address of the factory or warehouse; (ii) the declaration filed under sub-rule (1) does not contain all the details required to be contained therein or the manufacturer fails to comply with any other requirements under sub-rule (1); Provided that the Assistant Commissioner of Central Excise having jurisdiction over the factory of manufacturer intending to take credit is satisfied that duty due on the inputs has been paid and such inputs have actually been used or are to be used in the manufacture of final products, and such Assistant Commissioner shall record the reasons for not denying the credit so in each case." The Notification has been published in the gazette on 9th February, 1999. We find that the Central Board of Excise and Customs has issued a Circular No.441/7/99 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings in the normal course should be initiated. Efforts, however, should be directed toward reduction of litigation. 4. All pending cases may be disposed off accordingly. 5. Trade and field formations may be suitably informed." The question for consideration before us is whether Rule 57G is a mandatory provision and its amendment on 7.2.199 only prescribes the procedure for availing Modvat credit or creates any right. If it is former then the amendment shall apply retrospectively otherwise it shall be prospective in its operation. The basis of distinction between statutes affecting rights and those affecting merely procedure is well-recognised. Dixon, C.J. In Maxwell v. Murphy, (1957) 96 CLR 261, 267, drawing upon the following words of Lord Justice Mellish in Republic of Costa Rica v. Erlanger, (1876)3 Ch D 62, 69,said: "No suitor has any vested interest in the course of procedure, nor any right to complain, if during the litigation the procedure is changed, provided, of course, that no injustice is done." It is true that if one traces any substantive right back far enough it will be found secreted in the interstices of procedure. In W.H. Cockerline & Co. v. IRC, 16 TC 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the matters litigated. '...What facts constitute a wrong is determined by the substantive law; what facts constitute proof of a wrong is a question of procedure.' '..So far as the administration of justice is concerned with the application of remedies to violated rights, we may say that the substantive law defines the remedy and the right, while the law of procedure defines the modes and conditions of the application of the one to the other'." In Izhar Ahmad Khan v. Union of India, 1962 Supp 3 SCR 235 it is observed: (SCR p.251) "The division of law into two broad categories of substantive law and procedural law is well known. Broadly stated, whereas substantive law defines and provides for rights, duties and liabilities, it is the function of the procedural law to deal with the application of substantive law to particular cases and it goes without saying that the Law of Evidence is a part of the law of procedure." In Kesoram Industries and Cotton Mills Ltd. v. CWT (Central), AIR 1966 SC 1370, the Apex Court observed:(AIR p.1384, para 56) "Section 7(2) merely provides machinery in certain special cases for valuation of assets, and it is from the aggregate valuation of asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ples. The first is that while provisions of a statute dealing merely with matters of procedure may properly, unless that construction be textually inadmissible, have retrospective effect attributed to them, provisions which touch a right in existence at the passing of the statute are not to be applied retrospectively in the absence of express enactment or necessary intendment (see Delhi Cloth and General Mills Co.Ltd. v. CIT, AIR 1927 PC 242) The second is that a right of appeal being a substantive right the institution of a suit carries with it the implication that all successive appeals available under the law then in force would be preserved to the parties to the suit throughout the rest of the career of the suit. There are two exceptions to the application of this rule, viz., (1) when by competent enactment such right of appeal is taken away expressly or impliedly with retrospective effect and (2) when the court to which appeal lay at the commencement of the suit stands abolished(see Garkapatti Veeraya v. N.Subbah Choudhury, AIR 1957 SC 540 and Colonial Sugar Refining Co.Ltd. v. Irving, 1905 AC 369) Halsbury's Laws of England(Fourth Edn. Vol.44, para 925) states: "The presum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar." "24. Rule 1-BB thus partakes of the character of a rule of evidence. It deems the market value to be the one arrived at on the application of a particular method of valuation which is also one of the recognised and accepted methods. Even if a law raises a presumption and renders the presumption irrebuttable it is yet in the domain of the law of evidence. In Izhar Ahmad Khan case, it was pointed out by this Court: (SCR pp.258-59) "It would be noticed that as in the case of rebuttable presumption, so in the case of an irrebuttable presumption, the rule purports to assist the judicial mind in appreciating the existence of facts. In one case the probative value is statutorily strengthened but yet left open to rebuttal, in the other case, it is statutorily strengthened and placed beyond the pale of rebuttal. Considered from this point of view, it seems rather difficult to accept the theory that whereas a rebuttable presumption is within the domain of the law of evidence, irrebuttable presumption is outside the domain of that law and forms part of the substantive law." "25. On a consideration of the matter we are persuaded to the view that Rule 1-BB is essentially a rule of evid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dment made in Rule 57G and 57T as per Notification No.7/99 dated 9th February, 1999 and the Circular dated 23rd February, 1999 and directed the Jurisdictional Assistant Commissioner to examine the admissibility of Modvat credit. In the case of A.B. Card Clothing (Pvt) Ltd.(supra), the Punjab and Haryana High Court has held that no substantial question of law arises where the Tribunal has given benefit of the amended Rule 57G (11) and 57 T(11) of the Rules and the Circular dated 23rd February, 1999. The same view has been taken by the Punjab and Haryana High Court in the case of JCT Ltd. (supra) We find that the Madhya Pradesh High Court in the case of Union of India vs. Kataria Wires Ltd., 2009 (241) E.L.T. 31 (M.P.), has held that the claim cannot be defeated in the cases where original and the duplicate copies are lost if the receipt of the goods, their use in the manufacture of final product and duty paid character of inputs is not disputed. The paragraph 4 of the judgment is reproduced below:- "4. We have perused the impugned order, heard the learned counsel and carefully considered the requirement of Rule 57G of the Rules. Though Rule 52A in Sub. R. 3 lays down requirement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndition would disentitle the assessee any exemption and refund under the Statute. In the present case, the Tribunal has held that there is no dispute regarding duty payment and use of goods in manufacture of final product and the credit has been denied only on the ground that necessary particulars were not mentioned in the invoices and the supplier, which issued those invoices, did not enter the particulars in their statutory records. The appeal has been allowed in view of the amendment made in Rule 57G and the Board's Circular, which was issued in light of the amended rules" Applying the principles laid down by the Apex Court in the aforesaid cases to the facts of the present case, we are of the considered opinion that the amendment made in Rules 57G of the Rules by insertion of sub-rule (11) vide Notification No.7/99 dated 9th February, 1999 relates to procedure for availing Modvat credit and does not affect any substantive right. The view which we are taking is similar with the view taken by the Punjab & Haryana High Court as also Madhya Pradesh High Court and Chhatisgarh High Court as also the Circular issued by the Central Board of Excise and Customs dated 23rd February, 1999 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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