2005 (3) TMI 313 - AT - Central Excise

Summary

Issues: Availability of Modvat credit on incomplete invoices.

In this appeal, the issue revolved around whether Modvat credit of the duty paid on inputs is available based on incomplete invoices. The appellant, a financial services company, had availed Modvat credit for manufacturing developers using coated carrier received from another company. The dispute arose when the Modvat credit was disallowed due to procedural lapses in the invoices, such as missing details like registration number, mode of transport, vehicle number, time of removal of goods, and debit entries. The appellant argued that despite the missing information, they should still be allowed the credit as the goods were received and duty paid. The show cause notice raised concerns about the validity of the invoices under Central Excise Rules, but the appellant contended that the missing details did not prevent them from availing the credit. The appellant also cited a previous decision by the Tribunal in support of their case.

The appellant's advocate highlighted that the invoices, although incomplete, should not hinder the availability of Modvat credit as the goods were received and duty paid. The advocate argued that the denial of credit based on missing details was beyond the scope of the show cause notice. On the other hand, the Departmental Representative reiterated the findings of the impugned order, emphasizing that the issuing company was not registered as a dealer when issuing the invoices for Modvat purposes.

Upon considering both arguments, the Tribunal observed that the Revenue did not dispute the receipt of inputs or their duty-paid nature. The disallowance of Modvat credit was solely due to procedural lapses in the invoices. However, the Tribunal noted subsequent amendments in the Central Excise Rules, specifically Rule 57G, which allowed for the credit to be granted even if the invoices lacked certain particulars. The Tribunal referred to a Notification and Circular issued by the Board, empowering officials to overlook minor procedural lapses in invoices if satisfied about the duty paid nature and use of inputs in manufacturing processes. As the inputs' receipt, duty payment, and usage were undisputed, the Tribunal set aside the impugned order and allowed the appeal.

The Tribunal's decision highlighted the importance of considering subsequent amendments in rules that allow for flexibility in granting Modvat credit despite minor procedural lapses in invoices. The case underscored the significance of focusing on the essential aspects of duty payment and usage of inputs rather than strict adherence to invoice details.