Mahavir Spinning Mills Ltd. Vs. Commissioner of C. Ex. - Court Judgment

Excerpt:
1. the present appeal arises out of the order of the ld. commissioner (appeals) who held that "it is evident from the legal position prevalent at the material time and also from the findings of the order-in-original that the modvat credit was not admissible on the strength of invoice other than the duplicate copy. only with the issue of notification no. 23/94-c.e. (n.t.), dated 20-5-1994 modvat credit on the basis of original copy could be taken in case of loss of duplicate copy subject to the satisfaction of the jurisdictional asstt.commissioner." the ld. commissioner appeals upheld the order-in-original and rejected the appeal of the assessee.2. the facts of the case are that the assessee-appellant before us took modvat credit of rs. 6,27,454/- on polyester staple fibre and took modvat credit on the strength of original copy of invoices in 10 cases.the department alleged that modvat credit can be taken only on the strength of transporter's copy (duplicate copy) of invoices and since the appellants had taken modvat credit on the strength of original copy of the invoices, a show cause notice was issued to the appellants. in reply to the show cause notice, the appellants submitted that receipt of the goods is not disputed; its duty paying character is not disputed and, therefore, prayed that the assessee-appellant may be permitted to take credit of duty. the lower authorities relying on the contents of the notification no. 23/94, dated 20-3-1994 disallowed the benefit and hence the appeal before us.3. shri balbir singh, the ld. advocate appearing for the appellants, submits that transporter's copy in 9 cases was lost. in the 10th case, the transporter's copy is now available. he submits that notification no. 23/94-c.e. (n.t.) is clarificatory in nature inasmuch as it admits that there may be a loss of transporter's copy of gp 1, that is why the government issued the notification. he submitted that similar issue came up before the tribunal in the case of cce, jaipur v. shivshakti tube pvt. ltd. 1997 (90) e.l.t. 547 in which this tribunal held that receipt of the goods and their utilisation in final product is not disputed and that the credit taken on the strength of original invoices (duplicate transporter's copy having been lost), modvat credit was admissible, because notification no. 23/94-c.e. was clarificatory in nature. the ld. counsel submitted that the tribunal again in the case of bharat ispat v. cce 1996 (86) e.l.t. 536 held more or less the same view. he submitted that the ratio of these decisions fully covers their case and prays that the appeal may be allowed after dispensing with the pre-deposit of duty and also condone the delay in submission of the appeal.4. shri d.k. nayyar, the ld. jdr appearing for the respondent commissioner, submits that the requirement of notification no.23/94-c.e. (n.t.) is mandatory and shall be applicable only with effect from the date of its issue i.e. 20-5-1984. he submits that the hon'ble madras high court in the case of medopharma v. superintendent of central excise 1994 (70) e.l.t. 505 (madras), held that the requirement in the notification is mandatory and is not clarificatory in nature.the ld. jdr submitted that in the case of jai bhawani steel enterprises, the southern regional bench held that a notification shall be applicable prospectively. since the notification in dispute is notification no. 23/94 and was issued on 20-5-1994, therefore, the ld.dr submits that it will be applicable with effect from 20-5-1994 only and not for the retrospective period. he submitted that in view of the above legal position, the lower authorities have rightly denied them the benefit of notification no. 23/94 before 20-5-1994.5. heard the submissions of both sides. we find that the delay in submission of the appeal is only of 5 days. out of the 5 days, 2 days were holidays. we are satisfied with the explanation given by the appellant. the delay being only of 5 days including 2 holidays, we condone the delay.6. having regard to the fact that the case is fully covered by the decision of this tribunal, after hearing both the parties, we decided to dispense with the pre-deposit of duty and proceeded to hear the appeal itself.7. having heard both the parties, we find that similar issue came up before the tribunal in the case of cce, jaipur v. shivshakti tube private limited (supra) and also in the case of trishul alloys 1997 (92) e.l.t. 249 (tribunal) and bharat ispat. we find that the tribunal has taken the consistent view in-these three cases that since the receipt of the goods into the factory is not disputed and since the duty paying character of the goods is also not in dispute and since the endorsed invoice is a duty paying document and since notification no.23/94-c.e. (n.t.) was issued within a short span from the date of introduction of the new scheme with effect from 1-4-1994, held that modvat credit on original invoice will be available. we have also perused the judgment of the hon'ble madras high court which in the specific situation of the case held that the requirement of notification is mandatory. thus it was a specific decision on a particular notification and not holding that none of the notifications could be clarificatory. we have to examine each notification on its merits and then come to a conclusion whether a notification is mandatory or clarificatory in nature. thus, the decision in the instant case was that the notification no. 23/94 was clarificatory inasmuch as it was issued shortly after the introduction of the scheme and took care of eventuality which could take place in particular situations.we, therefore, hold that the decision of the madras high court is distinguishable. the ld. dr also brought to our notice the decision of the southern regional bench in the case of jai bhawani steel enterprises. we find that the facts in that case also are not identical and hence the ratio could not be applied to the facts of the present case.8. having regard to the above discussions, we allow the appeal.consequential relief, if any, shall be admissible to the appellants in accordance with law. the cod and the stay petition are also disposed of in the above terms.

Judgment:
1. The present appeal arises out of the order of the ld. Commissioner (Appeals) who held that "It is evident from the legal position prevalent at the material time and also from the findings of the order-in-original that the Modvat credit was not admissible on the strength of invoice other than the duplicate copy. Only with the issue of Notification No. 23/94-C.E. (N.T.), dated 20-5-1994 Modvat credit on the basis of original copy could be taken in case of loss of duplicate copy subject to the satisfaction of the jurisdictional Asstt.

Commissioner." The ld. Commissioner Appeals upheld the order-in-original and rejected the appeal of the Assessee.

2. The facts of the case are that the assessee-appellant before us took Modvat credit of Rs. 6,27,454/- on Polyester Staple Fibre and took Modvat credit on the strength of original copy of invoices in 10 cases.

The Department alleged that Modvat credit can be taken only on the strength of Transporter's copy (duplicate copy) of invoices and since the appellants had taken Modvat credit on the strength of original copy of the invoices, a show cause notice was issued to the Appellants. In reply to the show cause notice, the appellants submitted that receipt of the goods is not disputed; its duty paying character is not disputed and, therefore, prayed that the assessee-appellant may be permitted to take credit of duty. The lower authorities relying on the contents of the Notification No. 23/94, dated 20-3-1994 disallowed the benefit and hence the appeal before us.

3. Shri Balbir Singh, the ld. Advocate appearing for the appellants, submits that Transporter's copy in 9 cases was lost. In the 10th case, the transporter's copy is now available. He submits that Notification No. 23/94-C.E. (N.T.) is clarificatory in nature inasmuch as it admits that there may be a loss of transporter's copy of GP 1, that is why the Government issued the notification. He submitted that similar issue came up before the Tribunal in the case of CCE, Jaipur v. Shivshakti Tube Pvt. Ltd. 1997 (90) E.L.T. 547 in which this Tribunal held that receipt of the goods and their utilisation in final product is not disputed and that the credit taken on the strength of original invoices (Duplicate Transporter's copy having been lost), Modvat credit was admissible, because Notification No. 23/94-C.E. was clarificatory in nature. The ld. Counsel submitted that the Tribunal again in the case of Bharat Ispat v. CCE 1996 (86) E.L.T. 536 held more or less the same view. He submitted that the ratio of these decisions fully covers their case and prays that the appeal may be allowed after dispensing with the pre-deposit of duty and also condone the delay in submission of the appeal.

4. Shri D.K. Nayyar, the ld. JDR appearing for the respondent Commissioner, submits that the requirement of Notification No.23/94-C.E. (N.T.) is mandatory and shall be applicable only with effect from the date of its issue i.e. 20-5-1984. He submits that the Hon'ble Madras High Court in the case of Medopharma v. Superintendent of Central Excise 1994 (70) E.L.T. 505 (Madras), held that the requirement in the Notification is mandatory and is not clarificatory in nature.

The ld. JDR submitted that in the case of Jai Bhawani Steel Enterprises, the Southern Regional Bench held that a notification shall be applicable prospectively. Since the notification in dispute is Notification No. 23/94 and was issued on 20-5-1994, therefore, the ld.DR submits that it will be applicable with effect from 20-5-1994 only and not for the retrospective period. He submitted that in view of the above legal position, the lower authorities have rightly denied them the benefit of Notification No. 23/94 before 20-5-1994.

5. Heard the submissions of both sides. We find that the delay in submission of the Appeal is only of 5 days. Out of the 5 days, 2 days were holidays. We are satisfied with the explanation given by the Appellant. The delay being only of 5 days including 2 holidays, we condone the delay.

6. Having regard to the fact that the case is fully covered by the decision of this Tribunal, after hearing both the parties, we decided to dispense with the pre-deposit of duty and proceeded to hear the appeal itself.

7. Having heard both the parties, we find that similar issue came up before the Tribunal in the case of CCE, Jaipur v. Shivshakti Tube Private Limited (supra) and also in the case of Trishul Alloys 1997 (92) E.L.T. 249 (Tribunal) and Bharat Ispat. We find that the Tribunal has taken the consistent view in-these three cases that since the receipt of the goods into the factory is not disputed and since the duty paying character of the goods is also not in dispute and since the endorsed invoice is a duty paying document and since Notification No.23/94-C.E. (N.T.) was issued within a short span from the date of introduction of the new scheme with effect from 1-4-1994, held that Modvat credit on original invoice will be available. We have also perused the judgment of the Hon'ble Madras High Court which in the specific situation of the case held that the requirement of notification is mandatory. Thus it was a specific decision on a particular notification and not holding that none of the notifications could be clarificatory. We have to examine each notification on its merits and then come to a conclusion whether a notification is mandatory or clarificatory in nature. Thus, the decision in the instant case was that the Notification No. 23/94 was clarificatory inasmuch as it was issued shortly after the introduction of the scheme and took care of eventuality which could take place in particular situations.

We, therefore, hold that the decision of the Madras High Court is distinguishable. The ld. DR also brought to our notice the decision of the Southern Regional Bench in the case of Jai Bhawani Steel Enterprises. We find that the facts in that case also are not identical and hence the ratio could not be applied to the facts of the present case.

8. Having regard to the above discussions, we allow the appeal.

Consequential relief, if any, shall be admissible to the appellants in accordance with law. The COD and the Stay Petition are also disposed of in the above terms.