Commissioner of Central Excise, Vs. M/S. Ashok Leyland Ltd. - Court Judgment

Excerpt:
1. by this revenue appeal, the order of commissioner (appeal) in 194/96 cbe dt. 21.3.96 is challenged. the commissioner (appeals), in the impugned order, has held in para 3,- "3. i observe that there is nothing to indicate that the provisions of rule 57 g (2)(a) will be applicable only when the duplicate copy of the invoices is lost in transit. i do not think there is any sanctity about the duplicate copy being lost in transit. the rationale perhaps is that the in puts have really moved from the place of manufacture to the recipient's premises who avails modvat credit and that move often than not duplicate copies are lost only in transit due to the carelessness of the lorry drivers and the number of check posts they have to cross. it will be super technical to hold that if the invoice and the goods are received in the factory and thereafter the duplicate copies are lost, credit cannot be given on the basis of original copies of the invoices. there is evidence in the form of affidavits of the concerned official to prove that duplicate copies were received; in the appellants' premises an were lost only due to binders' carelessness. in any case, in accordance with the ratio of the decision of the high court of bombay in the case of bombay goods transport association, alternate evidence is available, according to the appellants to justify their claim. further, the circumstances, of the case do not warrant any penalty." the revenue has disagreed with the above observation and have made out a ground that as per rule 57 g (2)(a), a manufacturer can take credit on the inputs received in the factory on the basis of the original invoice, if the duplicate copy of invoice has been lost in transit, subject to the satisfaction of assistant commissioner. it is pleaded that in the instant case invoices were not lost in transit but at the premises of book binders as per the assessee's statement. it is, further, pleaded that when there was no evidence to prove that the inputs were accompanied by duplicate copies of the invoices, the assessee's statement as well as the affidavit of book binders do not merit any consideration as regards loss of duplicate copies of invoices. it is further pleaded that in the absence of any evidence that the duplicate of copies of invoices were not lost in transit, the modvat credit on the strength of original invoices cannot be extended under rule 57 g (2)(a). therefore, revenue seeks for setting aside the order.2. arguing for the revenue, the ld.dr points out that larger bench in the case of grasim industries ltd. vs. cce, indore 2000 (117) elt 551(t) have clearly laid down that assessee is required to prove the loss of the duplicate copies of invoices in transit and if such plea is not being made in reply to show cause notice, the benefit cannot be granted. he also points out the judgement in the case of geep industrial syndicate ltd. vs. cce, allahabad 1996 (87) elt 387 (t) wherein the then, hon'ble president justice mr. u.l. bhat has laid down that the assessee is required to file a copy of the fir to prove that loss of duplicate copies of invoices in transit. the ld.dr submits that even in the present case there was no loss of invoice in transit and therefore, the commissioner was totally misguided in coming to the conclusion that the issue is "super technical" to hold that the invoices and the goods are received in the factory and thereafter the duplicate copies are lost, and that the credit cannot be given on the basis of original copies of the invoices. ld.dr further submits that this observation is not in keeping with the law laid down by the larger bench. he also submits that commissioner (appeals) has misapplied the judgement rendered in the case of bombay goods transport association vs. union of india 1995 (77) elt 521 (bom) which deals on a different aspect of the matter and not on the issue of loss of duplicate copies of invoices in transit. he also points out with regard to para 4 of the grounds of appeal which distinguishes the judgement and the court states that in the instant case the assessee failed to produce such documents i.e. duplicate copies of invoices, therefore, they are not entitled to modvat credit.3. countering the arguments, the ld. counsel submits that of the larger bench judgement in the case of geep industrial syndicate (supra) is clearly distinguishable as in both the cases there was a loss of invoices during the transit. in the present case, the assessee had already taken modvat credit on the duplicate copies of the invoices as is noted in the show cause notice itself. however, the binders misplaced within the factory the books while binding was being done.therefore, the situation in the present case is not of loss of transit.he submits that they will be in a position to demonstrate and prove that they have taken modvat credit on the duplicate copies of the invoices before the bound copies were misplaced in their factory. ld.counsel submits that in bombay goods transport association case, it was held that collateral evidence can be produced to prove the loss of duplicate copies of invoices.4. on a careful consideration of the submissions we are inclined to agree with the arguments place by the ld.dr in the present case. the case does not fall within the ambit of loss of duplicate copies of invoices in transit" it is assessee's case that their binders misplaced the bound copies in the factory itself. in his affidavit, the binder does not give the details of 424 invoices. none of the affidavits mentioned the details of the invoices and how it was maintained. the assessee has not produced acknowledgement for having given these copies to the binders for binding purpose and has not explained as to how it got misplaced.5. we are not agreeable with the findings recorded by the ld.commissioner that the issue is "super technical". as the commissioner has remanded the matter to reconsider the issue, we would like to add that reconsideration has to be within the strict parameters of rule 57 g (2)(a) and in the light of the judgements cited by both the sides.the assessee is entitled to produce such evidence as permissible in law to show that the modvat credit can be taken on duplicate copies, which are lost in transit. the assessee's contention that the issue does not fall under rule 57 g(2)(a) may also be reconsidered by the original authorities in de novo consideration. they shall be afforded an opportunity of hearing by following the principles of natural justice.appeal is allowed by remand to original authority.

Judgment:
1. By this Revenue Appeal, the order of Commissioner (Appeal) in 194/96 CBE dt. 21.3.96 is challenged. The Commissioner (Appeals), in the impugned order, has held in para 3,- "3. I observe that there is nothing to indicate that the provisions of rule 57 G (2)(A) will be applicable only when the duplicate copy of the invoices is lost in transit. I do not think there is any sanctity about the duplicate copy being lost in transit. The rationale perhaps is that the in puts have really moved from the place of manufacture to the recipient's premises who avails Modvat credit and that move often than not duplicate copies are lost only in transit due to the carelessness of the lorry drivers and the number of check posts they have to cross. It will be super technical to hold that if the invoice and the goods are received in the factory and thereafter the duplicate copies are lost, credit cannot be given on the basis of original copies of the invoices. There is evidence in the form of affidavits of the concerned official to prove that duplicate copies were received; in the appellants' premises an were lost only due to binders' carelessness. In any case, in accordance with the ratio of the decision of the High Court of Bombay in the case of Bombay Goods Transport Association, alternate evidence is available, according to the appellants to justify their claim. Further, the circumstances, of the case do not warrant any penalty." The Revenue has disagreed with the above observation and have made out a ground that as per Rule 57 G (2)(A), a manufacturer can take credit on the inputs received in the factory on the basis of the original invoice, if the duplicate copy of invoice has been lost in transit, subject to the satisfaction of Assistant commissioner. It is pleaded that in the instant case invoices were not lost in transit but at the premises of Book Binders as per the assessee's statement. It is, further, pleaded that when there was no evidence to prove that the inputs were accompanied by duplicate copies of the invoices, the assessee's statement as well as the affidavit of Book Binders do not merit any consideration as regards loss of duplicate copies of invoices. It is further pleaded that in the absence of any evidence that the duplicate of copies of invoices were not lost in transit, the Modvat credit on the strength of original invoices cannot be extended under Rule 57 G (2)(A). Therefore, Revenue seeks for setting aside the order.

2. Arguing for the Revenue, the Ld.DR points out that Larger Bench in the Case of Grasim Industries Ltd. vs. CCE, Indore 2000 (117) ELT 551(T) have clearly laid down that assessee is required to prove the loss of the duplicate copies of invoices in transit and if such plea is not being made in reply to show cause notice, the benefit cannot be granted. He also points out the judgement in the case of Geep Industrial Syndicate Ltd. Vs. CCE, Allahabad 1996 (87) ELT 387 (T) wherein the then, Hon'ble president Justice Mr. U.L. Bhat has laid down that the assessee is required to file a copy of the FIR to prove that loss of duplicate copies of invoices in transit. The Ld.DR submits that even in the present case there was no loss of invoice in transit and therefore, the Commissioner was totally misguided in coming to the conclusion that the issue is "super technical" to hold that the invoices and the goods are received in the factory and thereafter the duplicate copies are lost, and that the credit cannot be given on the basis of original copies of the invoices. Ld.DR further submits that this observation is not in keeping with the law laid down by the Larger Bench. He also submits that Commissioner (Appeals) has misapplied the judgement rendered in the case of Bombay Goods Transport Association vs. Union of India 1995 (77) ELT 521 (Bom) which deals on a different aspect of the matter and not on the issue of loss of duplicate copies of invoices in transit. He also points out with regard to para 4 of the grounds of appeal which distinguishes the judgement and the court states that in the instant case the assessee failed to produce such documents i.e. duplicate copies of invoices, therefore, they are not entitled to Modvat credit.

3. Countering the arguments, the Ld. Counsel submits that of the Larger Bench judgement in the case of Geep Industrial Syndicate (supra) is clearly distinguishable as in both the cases there was a loss of invoices during the transit. In the present case, the assessee had already taken Modvat credit on the duplicate copies of the invoices as is noted in the show cause notice itself. However, the Binders misplaced within the factory the books while binding was being done.

Therefore, the situation in the present case is not of loss of transit.

He submits that they will be in a position to demonstrate and prove that they have taken Modvat credit on the duplicate copies of the invoices before the bound copies were misplaced in their factory. Ld.

Counsel submits that in Bombay Goods Transport Association case, it was held that collateral evidence can be produced to prove the loss of duplicate copies of invoices.

4. On a careful consideration of the submissions we are inclined to agree with the arguments place by the Ld.DR in the present case. The case does not fall within the ambit of loss of duplicate copies of Invoices in transit" It is assessee's case that their Binders misplaced the bound copies in the factory itself. In his affidavit, the Binder does not give the details of 424 invoices. None of the affidavits mentioned the details of the invoices and how it was maintained. The assessee has not produced acknowledgement for having given these copies to the Binders for binding purpose and has not explained as to how it got misplaced.

5. We are not agreeable with the findings recorded by the Ld.

Commissioner that the issue is "super technical". As the Commissioner has remanded the matter to reconsider the issue, we would like to add that reconsideration has to be within the strict parameters of Rule 57 G (2)(A) and in the light of the judgements cited by both the sides.

The assessee is entitled to produce such evidence as permissible in law to show that the Modvat credit can be taken on duplicate copies, which are lost in transit. The assessee's contention that the issue does not fall under Rule 57 G(2)(A) may also be reconsidered by the original authorities in de novo consideration. They shall be afforded an opportunity of hearing by following the principles of natural justice.

Appeal is allowed by remand to original authority.