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2016 (8) TMI 398 - PUNJAB AND HARYANA HIGH COURT

2016 (8) TMI 398 - PUNJAB AND HARYANA HIGH COURT - 2016 (342) E.L.T. 513 (P & H), [2016] 94 VST 219 (P&H) - Input Tax Credit - Tribunal rejecting the claim of Input Tax Credit merely on the grounds of technicalities - Held that:- In the case in hand, the selling dealer is a manufacturing unit covered under the provisions of the 1944 Act. For sale of the goods to the appellant, it had issued Invoice-cum-Excise Gate Pass. This is so provided under the Central Excise Rules, 1944. It contains all ma .....

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Input Tax Credit is available to a person against this copy”. The opinion expressed by the authorities is that it is a mandatory condition, which cannot be ignored. Mere non-mentioning thereof is fatal. - In our view, the opinion expressed is contrary to the law laid down by this court as these type of technical defects in the invoices cannot be fatal for grant of input tax credit to the claimant. The claim of the appellant had been rejected only on the ground that the invoice did not conta .....

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aim of input tax credit merely on technicalities, when the dealer was able to show that the tax had been paid to the selling dealer and duly deposited with the State. Provisions of Rule 54 of the Rules are not mandatory, in case the claimant/dealer is able to prove from other evidence that the transaction and the claim is genuine. - VATAP No. 34 of 2012 (O&M) - Dated:- 2-8-2016 - MR. RAJESH BINDAL AND MR. HARINDER SIINGH SIDHU, JJ. For The Appellant : Mr. Sandeep Goyal, Advocate For The Responde .....

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hnicalities when the selling dealer has shown the sales made to the appellant in his return and has duly deposited the tax on those sales ? (ii) Whether on the facts and in the circumstances of the case, the Ld. Tribunal was justified in holding that the provisions of Rule 54 are mandatory in nature ? 2. The dispute is regarding claim of input tax credit for the period from 1.7.2009 to 31.3.2010. 3. Learned counsel for the appellant submitted that during the aforesaid period, the appellant purch .....

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sessing Authority issued notice for determination thereof. Though all the invoices and other documents were produced by the appellant before the Designated Authority, but still the claim of input tax credit on the material purchased from Sada Shiv Casting Pvt. Ltd. was rejected, vide order dated 6.9.2010. Aggrieved against the order so passed, the appellant preferred appeal, which was rejected by the Deputy Excise and Taxation Commissioner (Appeals), Patiala vide order dated 24.5.2011. Still fur .....

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mation as provided for in the Rules was available in the invoices. Merely because on the original copy of the VAT invoice, the words Input Tax Credit is available to a person against this copy were not printed on the invoice will not debar the appellant from claiming input tax credit, as the same being highly technical, once sufficient material was produced in evidence before the competent authority to show that the seller had deposited the amount of tax collected from the appellant with the dep .....

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r mutilated, as the claim can be made on production of other evidence. Claim is admissible in case the competent authority is satisfied. In support of his submissions, reliance was placed upon judgments of Division Bench of this court in Commissioner of Central Excise, Ludhiana v. Ralson India Ltd., 2006(202) ELT 759 and Commissioner of C. Ex., Delhi-III, Gurgaon v. Myron Electricals Private Limited, 2007(207) ELT 664; GCR No. 5 of 1999-Commissioner of Central Excise, Chd. v. M/s Aarti Steels Lt .....

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The onus to prove the same is on the claimant. Rule 18 of the Rules provides for conditions for claiming input tax credit. Rule 21 of the Rules provides that no input tax credit shall be admissible in respect of a purchase, in case the invoice does not contain the requisite information, as specified in Rule 54 of the Rules. Rule 54 of the Rules, inter-alia, provides that VAT invoice should have the words Input Tax Credit is available to a person against this copy . The word shall in the provisio .....

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l be entitled to the input tax credit, in such manner and subject to such conditions, as may be prescribed, in respect of input tax on taxable goods, including capital goods, purchased by him from a taxable person within the State during the tax period: xx xx xx (12) Save as otherwise provided hereinafter, input tax credit shall be allowed only against the original VAT invoice and will be claimed during the period in which such invoice is received. (13) In case the original VAT invoice is lost o .....

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e onus to prove that the VAT invoice on the basis of which, input tax credit is claimed, is bona fide and is issued by a taxable person, shall lie on the claimant. Rules 18, 21, 26 and 54 of the Rules R.-18. Conditions for input tax credit.- The input tax credit under Section 13 of the Act will be admissible to a taxable person, if such a person has - (a) in his possession the original VAT invoice, issued to him by a taxable person, from whom purchase of such goods has been made, wherein tax cha .....

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ll be reversed immediately on occurrence of such event. (2-A) Input Tax Credit shall be allowed to a taxable person to the extent of tax payable on the resale value of goods or sale value of manufactured/processed goods where such goods by the taxable person are sold at a price,- (i) Lower than purchase price of such goods in the case of resale; or (ii) Lower than Cost price in the case of manufactured/ Processed goods; and in such cases the balance Input Tax Credit (ITC) shall be reversed by th .....

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a taxable person against the bonafide transaction; (b) does not contain all the required information as specified in rule 54; and (c) has been issued by a person, whose certificate of registration has been cancelled under the provisions of the Act. (4) Where some goods as input or output are lying in the stock of a taxable person and where such goods become tax-free from a particular date, then from that date, no input tax credit shall be admissible to the taxable person on the sale of goods lyi .....

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so availed for such part of goods will be deducted from input tax credit for the relevant period of use or disposal referred to above. If, as a result of such deduction, there is negative input tax credit balance for a particular period, the person concerned shall pay such tax forthwith, as if the same was payable in the said period. (7) Input tax credit in the case of Iron and Steel goods as enumerated in clause (iv) of section 14 of the Central Sales Tax Act, 1956, except wheels, tyres, axles .....

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rate. xx xx xx R..-26. Input tax credit on duplicate invoice.- (1) In case, the original VAT invoice has been lost, destroyed or mutilated, a taxable person, shall make an application to the designated officer in Form VAT-7 along with a duplicate copy of VAT invoice, issued by the seller and an indemnity bond in Form VAT-8 for the amount, equal to the amount of input tax claimed under such invoice. (2) On receipt of such application, the designated officer shall cross-check the transaction and a .....

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ic or mechanical device. It shall be at least in triplicate, i.e. Original Copy, second copy and the last copy. The respective copies of the invoice shall bear these words clearly. (2) On the original copy of the VAT invoice, the words Input Tax Credit is available to a person against this copy shall be printed and it will be issued to the purchaser only. On the second copy, the words This copy does not entitle the holder to claim Input Tax Credit shall be printed and this copy shall be used for .....

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an once; (b) the date of issue; (c) the name, address and registration number of the selling person. (d) the name, address and registration number of the purchaser; (e) full description of the goods; (f) the quantity of the goods; (g) the value of the goods per unit; (h) the rate and amount of tax charged in respect of taxable goods; (i) the total value; (j) If the goods are being sold, transferred or consigned to a place outside the State, serial number of Form VAT-36; (k) mode of transportatio .....

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his invoice: First Importer/ Manufacture (1) First State Taxable person (2) Second Stage Taxable person (3) Name of the Taxable person 10 of 19 TIN Commodity Weight (In M.T.) Invoice No. Tax liability Stamp and Signature Note:- (1) The first stage taxable person shall fill column 1 and 2, the second stage taxable person shall fill column 1, 2 and 3. 2. Admissibility of ITC is subject to furnishing of correct information. 9. Section 13 of the Act provides that a taxable person shall be entitled t .....

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med false input tax credit, the competent authority can order for recovery thereof without prejudice to any penal action. 10. Rule 18 of the Rules provides that input tax credit shall be available in case the taxable person has original VAT invoice issued to him by the taxable person from whom the goods have been purchased. The tax charged thereon has been shown separately. He has maintained proper record of his purchases eligible for input tax credit. Rule 21 of the Rules, which prescribes cert .....

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imant after the designated officer cross-checks the transaction and satisfies himself about the genuineness of the transaction. Rule 54 of the Rules provides the particulars to be mentioned in a VAT invoice. It provides that VAT invoice shall be issued from duly bound invoice or cash memo book, except where it is prepared on computer or any other electronic or mechanical device. It shall be in triplicate. The original copy of the VAT invoice shall contain the words input tax credit is available .....

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of tax charged, total value, mode of transportation, stage of purchase and the signature of the authorised person of the selling dealer. 11. The issue as to whether minor discrepancy in the contents of an invoice will be fatal for making a claim for input tax credit was considered by Division Bench of this Court in M/s New Devi Grit Udyog's case (supra). The case pertained to the claim made under Haryana Value Added Tax Act, 2003. It contains similar provisions with reference to the content .....

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the interest of revenue from non-genuine transaction. It is procedural in nature and does not confer any substantive right. In the event of non-mentioning of certain particulars, heavy onus is on the dealer claiming input tax credit to produce other sufficient evidence to show that the transaction was genuine and that the tax was paid to the selling dealer. While referring to the judgments in Standard Concrete & Stone Agency, Faridabad and others v. State of Haryana and others, (1998) 12 PH .....

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mber. No doubt, non mentioning of the name and the TIN number can be a circumstance, but it cannot be held to be conclusively against the purchaser. The judgment cited by learned counsel for the State in Babu Verghese's case (supra) was different. The question involved therein was validity of extension granted by the Bar Council of India to existing members of Kerala Bar Council (KBC) under proviso to Section 8 of the Advocates Act, 1961 and consequent validity of elections held by KBC durin .....

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s stand disposed of as such. 12. Considering a similar issue with reference to entitlement of modvat credit under the 1944 Act, a Division Bench of this Court in Ralson India Ltd.'s case (supra) opined that mere technicalities should not be a hurdle in grant of modvat credit under the beneficial scheme once it is proved that the transaction was genuine and the tax had been paid to the State. Paragraph 9 thereof is extracted below: 9. Rule 57A of the Rules allows to a manufacturer credit of a .....

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o sub-rule (3). It provides that a manufacturer may take credit on the inputs received in his factory on the basis of original invoice, if duplicate copy of the invoice has been lost in transit, subject to the satisfaction of the Assistant Commissioner of Central Excise that : (i) the inputs have been received in the factory of the said manufacturer and (ii) the duty was paid on such inputs. The scope of satisfaction of the Assistant Commissioner is restricted to the two aforenoted aspects. From .....

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- C.E. (N.T.), dated 20-5-1994 has been issued by the Board enabling a manufacturer to take Modvat credit on the basis of original copy of the invoice, provided the loss of duplicate copy of the invoice had occurred only in transit and the Assistant Commissioner is satisfied about its loss. 13. The issue was also considered by a Division Bench of this Court in M/s SPL Industries Ltd.'s case (supra). It was a case where rebate of duty on export of goods was under consideration. The petitioner .....

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nt paragraph thereof is extracted below: We have heard learned counsel for the parties at length and find that the claim of the petitioner for rebate is required to be examined in the light of documents produced by the petitioner in support of the assertion that the goods were in fact exported. The production of original and the duplicate copy of ARE-1 Form duly endorsed by the Officer of the Customs is prima-facie proof of the fact that the goods have been exported. Even if the documents are pr .....

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e absence of original/duplicate copy of ARE-1 Form. The express language of the notification is the recording of the satisfaction of the Central Excise Officer that the claim is in order so as to sanction the rebate either in whole or in part. Since such exercise has not been undertaken by the Adjudicating Officer or any of the authorities under the Act, therefore, we set aside the orders passed and remit the matter back to the Adjudicating Authority to record a satisfaction to the effect whethe .....

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ompetent authority could still opine, in case there is sufficient material available with him, that the transaction was not genuine and the claimant/dealer was not entitled to the benefit. The prescribed form is merely a prima facie proof. 15. In the case in hand, the selling dealer is a manufacturing unit covered under the provisions of the 1944 Act. For sale of the goods to the appellant, it had issued Invoice-cum-Excise Gate Pass. This is so provided under the Central Excise Rules, 1944. It c .....

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