Sharanpur Engg. Works Vs. Commissioner of Central Excise - Court Judgment

Excerpt:

.....border they handed over both original and duplicate invoices to the officers manning the post. only the original invoices were returned to them. in fact they have submitted certificate obtained from the lamba motors of the concerned transport company to the effect that duplicate invoices were taken over by the sales tax officers. assistant commissioner has been empowered to allow such credit on such invoice and he ought to have exercised his discretion and not to penalise merely because they took modvat credit on their own.4. i have heard both sides. rule 57g(2a) stipulates manufacturers can take credit on invoices received in the factory on the basis of original invoices if the duplicate copy of the invoice was lost in transit subject to the satisfaction of the assistant commissioner. it is true that they did not apply to the assistant commissioner before availing the modvat credit. but a mere procedural irregularities cannot have the effect of denying substantial benefit to which they may be otherwise admissible. there is no dispute regarding the admis-sibility or otherwise to modvat credit to inputs or receipt of the inputs in their factory. final order no. a/143/97-nb, dated.....

Judgment:

1. The Appellants received inputs under cover of original invoices.

They claimed that duplicate invoices were lost in transit. The credit was disallowed to them on the ground that they had availed Modvat credit without obtaining prior permission from the competent authority in regard to the original invoices.

2. Arguing for the Appellants, the ld. Counsel submitted that during octroi checking at the border they handed over both original and duplicate invoices to the officers manning the post. Only the original invoices were returned to them. In fact they have submitted certificate obtained from the Lamba Motors of the concerned transport company to the effect that duplicate invoices were taken over by the Sales Tax officers. Assistant Commissioner has been empowered to allow such credit on such invoice and he ought to have exercised his discretion and not to penalise merely because they took Modvat credit on their own.

4. I have heard both sides. Rule 57G(2A) stipulates manufacturers can take credit on invoices received in the factory on the basis of original invoices if the duplicate copy of the invoice was lost in transit subject to the satisfaction of the Assistant Commissioner. It is true that they did not apply to the Assistant Commissioner before availing the Modvat credit. But a mere procedural irregularities cannot have the effect of denying substantial benefit to which they may be otherwise admissible. There is no dispute regarding the admis-sibility or otherwise to Modvat credit to inputs or receipt of the inputs in their factory. Final order No. A/143/97-NB, dated 14-3-1997 which was cited indicates that Assistant Commissioner has to exercise satisfaction in a judicious way. I am of the view that in terms of Rule 57G(2A) Assistant Commissioner ought to have examined whether or not duplicate invoices had been lost in transit. Merely delay on the part of the appellants in seeking relaxation if invoices otherwise were lost in transit cannot deprive the appellants to avail the benefit of Modvat credit. I, therefore, set aside the impugned order and remand the matter to the Assistant Commissioner for de novo decision who shall take into account the evidence that may be placed before him to satisfy himself the duplicate invoices indeed have been lost. Since the matter is being remanded the Tribunal would appreciate if the matter is decided expeditiously say, within three months.