Full Judgment
2. The assessees had taken Modvat credit on the basis of two invoices both dated 27-9-1994 issued by M/s. SAIL. These invoices were marked as "Customer/Transporter". After issue of a show cause notice and after hearing the assessees, the Assistant Collector passed orders denying Modvat credit on the ground that the subject invoice was not a duplicate copy for transporter as set out in Rule 52A. The Collector (Appeals), on the observation that at the material time there were no conditions, in Rule 57GG that such invoices should be marked as "duplicate for transporter" and that this condition was later incorporated by insertion of sub-rule 4(a) of Rule 57GG; granted relief to the assessees. Against this order, the Revenue have come in appeal.
In the appeal memorandum, reliance has been placed on Board's Circular No. 70/70/94-CX. 8, dated 24-10-1994 in which it has been directed that the provisions of Rule 52A should apply to invoices issued under Rule 57GG also.
3. I have heard Shri A.M. Tilak, ld. DR for the Revenue and Ms. Reena Khair, ld. Advocate for the Respondents.
4. On the date, when these invoices were issued, Rule 52A prescribed that the duplicate copy of the invoice issued by a manufacturer from his factory or his warehouse should be marked "duplicate for transporter" which was to be used for taking credit under Rule 57G or Rule 57T. The subject invoices were issued by the stock yards of the SAIL. It is not disputed that goods had moved from the manufacturing to these stock yards on payment of duty under invoices issued under Rule 52A. Therefore, these stock yards were clearly not a factory or a warehouse and, therefore, the provisions of Rule 52A would not apply to such invoices issued from the stock yards at the material time.
5. Ms. Khair, ld. Advocate submitted that the stock yards were registered under Rule 174 as dealers and, therefore, the rule which applied was the Rule 57GG. This rule vide sub-rule (4) required the registered persons to issue an invoice containing the details as prescribed by the CBEC or by the Collector of Customs & Central Excise.
The rule did not stipulate as to how the various copies of invoices were to be marked and as to which copy would be used for taking credit.
This was later done by way of insertion of sub-rule 4(a) vide Notification 2/95-C.E. (N.T.), dated 19-1-1995.
6. Shri Tilak, ld. DR submits that the circular relied upon in the appeal memo was issued by the CBEC in terms of sub-rule (4) of Rule 57GG. I have seen this circular as extracted at pages 322 and 323 of volume 74 of the E.L.T. as also at page 468 of Taxman's Modvat 1995.
The language of the circular does not suggest that it has been issued under the powers vested in terms of sub-rule (4) of Rule 57GG. The rule empowers the Board to prescribe the details of the invoices but does not empower the Board to import the provisions of another rule into this rule. The powers under sub-rule (4) have been exercised in issuing the Notification No. 23/95-C.E. (N.T.) wherein details have been described. I find, on perusal of the sub-rule (4) as also the language of the circular that the direction of incorporating the provisions of sub-rule (3) of Rule 52A was beyond the power vested by sub-rule (4) of Rule 57GG. That is why, perhaps, it was thought necessary to introduce sub-rule (4)(a) at the later stage.
7. Since the circular lacked the authority of law and since the sales depots were not either the manufacturer or a warehouse and since no specific directions were given under Rule 57GG as to which copy of the invoices qualified for taking Modvat credit, I find that the Collector was correct in the stand taken by him. The appeal from the Revenue is accordingly dismissed.