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TMI Blog2014 (8) TMI 615X X X X Extracts X X X X X X X X Extracts X X X X ..... merely procedural in nature? 2. In the facts and circumstances of the case, whether the first respondent is correct in denying the Modvat Credit to the extent of Rs. 4,63,570/- when there is no dispute with regard to the compliance with the substantial conditions for availing the Modvat Credit viz., inputs have suffered Central Excise duty, such duty paid goods were received into the factory under the cover of the duty paying document and the said inputs were used in the manufacture of the final product and there is only a technicality involved in denying the Modvat Credit? 3. In the facts and circumstances of the case, whether the first respondent was correct in denying the Modvat Credit for procedural lapses? 4. In the facts and circumstances of the case, whether the first respondent was correct in denying the Modvat Credit to the extent of Rs. 78,086/- on the ground that Modvat Credit was taken on the basis of Original copy of the invoice, when the relevant Rule 57G itself permitted the availment of credit on the basis of Original copy of invoices, if the duplicate for the transporter is lost, but the inputs were received into the factory of manufacture and used in the manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal held that out of the disputed amount of Rs. 1,13,728/-, the appellant is entitled to credit of Rs. 26,218/- and upheld the demand for the balance amount of duty and reduced the penalty to Rs. 15,000/- as against Rs. 25,000/- imposed. 2.6. Aggrieved by the said common order passed by the Tribunal, the present appeals are filed on the substantial questions of law, referred supra. 3. We have heard the learned counsel on either side and perused the order passed by the Tribunal and the authorities below. Substantial Questions of law (1) to (3): 4.1. Before considering substantial questions of law (1) to (3), it will be relevant to refer to Rules 52A and 57G of the Central Excise Rules, 1944 (for brevity, the Rules ), which read as under: Rule.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, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t travel together but separately or at intervals, a separate invoice shall be made out in respect of each vehicle, vessel, pack animal or other conveyance. (5) Invoice shall be maintained in two sets (i) one for clearance for home consumption; 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 acknowledgment 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a dealer on or before the 31st day of August, 1996; (h) an invoice issued by an importer registered under Rule 174 and duly authenticated by the proper officer; (i) an invoice issued by an importer from his depot or from the premises of the consignment agent of the 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to cover the duty of excise payable on the final products cleared at any time. (8) A manufacturer of final products shall submit within five days after the close of each month to the Superintendent of Central Excise, a monthly return indicating the 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 pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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.' and under such backdrop, the Division Bench of Allahabad High Court held that procedural lapses need not be cited as a ground for denying the Modvat Credit. 4.4. In the case on hand, it is not in dispute that there is one invoice already produced which shows payment of duty on the goods removed from Visakhapatnam Steel Plant. But insofar as goods which have been split up into several smaller consignments, Rule 52A(4) of the Rules clearly mandates that if all the packages comprising a consignment are despatched in one lot at any one time, only one invoice shall be made out in respect of the consignment. It also provides that if, however, a consignment is split up into two or more lots each of which is despatched separately either on the same day or on different days, a separate invoice shall be made out in respect of each such lot. It further provides that in case a consignment is loaded on more than one vehicle, vessel, pack animal or other means of conv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... swer substantial question of law (4) in favour of the appellant. 6.1. The learned counsel for the appellant made a plea on levy of penalty stating that it is a bona fide clearance with no intention to evade duty. He pleads that the since there is no dispute with regard to the nature of goods and the duty paid, the penalty imposed should be set aside. Accordingly, the following question of law is formulated: Whether in the facts and circumstances of the case penalty is leviable? 6.2. We have heard the learned counsel for the appellant and the learned Senior Standing Counsel for the second respondent on this question of law as well. 6.3. We find that in the present case the goods have been supplied by Visakhapatnam Steel Plant, a Government of India Undertaking, and the department has accepted the plea that the entire inputs have suffered duty. However, the only reason attributable for levy of penalty is that the goods were not accompanied with proper invoices, as required under Rule 52A(4) of the Rules. From a reading of the orders of the Tribunal and the authorities below, it is clear that the appellant had no intention either to evade payment of duty or to avail duty wrongfull ..... X X X X Extracts X X X X X X X X Extracts X X X X
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