ASHOK LEYLAND LTD. Vs. CCE

JUDGEMENT

(1.) All these three appeals arises from common Order -in -Appeal Nos. 106 to 108/99 dated 25.5.99, passed by the Commissioner (Appeals), Chennai, has confirmed the Order -in -Original in rejecting the modvat credit solely on the ground that the appellants had received the documents from M/s. Madras Suspension (Karnataka) Pvt. Ltd. (MSKPL), Hosakote for manufacture of components on job -work basis while the commercial invoice had been raised in respect of the same goods from M/s. Madras Suspension Private Ltd., Madurai (MSPL). The appellant had placed the order for supply of these items to M/s. MSPL, Madurai, who in turn had placed the order for manufacture of these items to M/s. MSKPL Hosakote. The inputs have been received in terms of the order placed by the appellant from M/s. MSKPL., Hosakote. The Commercial invoice was raised by M/s. MSPL, Madurai, which tallied with the goods supplied by M/s. MSKPL Ld. Commissioner after due examination did not accept the documents although he admitted that the goods were received under cover of MSKPL invoices which shows the excise duty payment and relevant serial number in the RG 23A debit or PLA etc. e.g. Invoice No. 591 dt. 18.12.94. However, he noticed that the credit was raised on the basis of MSPL documents which is only a commercial invoice and is not eligible for credit even if it gives a cross reference to MSKPL documents. In that light of the matter, he did not accept the commercial invoice and the relevant document of MSPL, as a valid document for the grant of modvat credit and confirmed the original order directing the appellants to reverse the modvat credit.

(2.) Ld. Counsel submits that it is a usual procedure in the industries to place orders to one of the manufacturers and the said manufacturer would place orders to their job workers and direct the job workers to supply these items directly as required by the appellant. The manufacturer raised the commercial invoice in terms of the orders received by them, which tallied with the invoiced of the job workers. In terms of the duty paid documents, these documents are also relevant documents for taking modvat credit. He submits that in a similar situation, the Tribunal accepted the plea and held that the documents are valid documents for the grant of modvat credit. He relied on the judgment of Eveready Industries India Ltd. v. CCE, Hyderabad, 1997 (89) ELT 180 (Tri.), the Tribunal noted the fact of transit sale of inputs received directly at Hyderabad from the manufacturer but with invoice in favour of a dealer at Calcutta. The destination of the goods was shown as Hyderabad, The dealer also raised invoice for the same goods in the name of the appellant giving description and necessary duty particulars required under Notification No. 15/94 -CE (NT). In view of this, the corresponding documents were verifiable. The Tribunal held that there is substantial compliance with the procedure and the appellant were eligible for modvat credit.

(3.) In the case of BEEPEE Coatings Ltd. v. CCE, Vadodara, 1997 (92) ELT 223 (Tri.) the Tribunal held that the appellant were entitled to the claim of modvat credit, on the fact that the inputs were received by the job workers with invoice in the name of the customer. Such invoices were then endorsed by the customers in favour of the job worker. Therefore, the Tribunal held that the modvat credit was not deniable when correlation of inputs with duty paid documents is established. The Tribunal followed its own judgment rendered in case of Prakash Cotton Mills Ltd. v. CCE, Bombay, 1996 (85) ELT 149.