S.R.F. LTD., BHIWANDI Vs. CCE, JAIPUR

JUDGEMENT

(1.) The appellants are manufacturers of chemicals and are availing the benefit of Modvat credit on eligible inputs used in the manufacture of such chemicals. Sulphuric acid and Low Sulphur Heavy Stock (in short, LSHS) are two of such inputs. In June 1994, they took Modvat credit of the duty paid on sulphuric acid amounting to Rs.6,023.00 and similar credit of the duty paid on LSHS amounting to Rs.37,909.00, totalling to Rs.43,932.00. The Department alleged that the credits were wrongly taken on the strength of invalid documents. The credit on sulphuric acid [manufactured by m/s Hindustan Copper Ltd. and supplied to the appellants by M/s Sunny Trading Corporation, the dealers of the manufacturers] was taken on the strength of endorsed invoices of M/s Hindustan Copper Ltd. as well as invoices issued by the dealer subsequent to delivery of the goods. The Department alleged that neither the endorsed invoices of the input -manufacturer nor the invoices of the dealer were proper and valid duty -paying documents for the purpose of availment of credit under Rule 57G of the Central Excise Rules. The dealer's invoices were held to be inadmissible on the ground that they were issued subsequent to the date on which the inputs were supplied to the appellants and the latter took credit thereon. As regards the Modvat credit on LSHS, the same was taken on the strength of delivery challans issued under Rule 52A by the Indian Oil Corporation [IOC]. The allegation of the Department in this connection was that the documents issued by the IOC were the originals thereof, which were not valid documents for the purpose of taking Modvat credit. According to the Department, only the "duplicate for transporter" copy could be admitted for the purpose. On this basis, the Department by show -cause notice [SCN] directed the appellants to show cause why the Modvat credits should not be disallowed. The appellants contested the proposed action. The dispute was adjudicated by the jurisdictional Assistant Commissioner who, after examining various Notification, upheld the Department's allegations and confirmed the demand of duty of Rs.43,932.00 against the appellants. The appeal filed by the party against the order of the Assistant Commissioner was rejected by the Commissioner (Appeals). Hence the present appeal of the assessees before the Tribunal.

(2.) I have heard both sides. Ld. Advocate Shri M.P.Devnath for the appellants submits that, before 01.04.1994, Modvat credit on inputs could be validly taken on the strength of original copy [carrier copy] of gate passes issued under Rule 52A of the Central Excise Rules by the input -manufacturers. From 01.04.1994, the corresponding documents are the "duplicate for transporter" copies of invoices issues under Rule 52A (as amended) by the input -manufacturers. Ld. Advocate submits that, for some time during the transitional period, M/s IOC used to issue their invoices in the form of delivery challans under Rule 52A by making use of their old stationery. In other words, the printed format of the "carrier" copy of gate pass was used for the purpose of invoice under Rule 52A for certion period after 01.04.1994. The delivery challans of M/s IOC, on the strength of which Modvat credit was taken by the appellants on LSHS, were issued in June 1994 in this manner. Ld. Counsel submits that such documents were valid duty -paying documents for the purpose of availment of Modvat credit by virtue of decisions of the Tribunal, provisions of Rule 57H of the Central Excise Rules and relevant circulars of the Central Board of Excise and Customs. In this connection, he has relied on the following decisions of the Tribunal:

(3.) Ld. JDR Shri S.C.Pushkarna has opposed the above arguments. He submits that M/s IOC, in fact, issued the "carrier" copy of the erstwhile gate pass, which was not a valid document for availment of Modvat credit after 01.04.1994. The "carrier" copy of gate pass was the original copy. After 01.04.1994, Modvat credit is not admissible on any original copy. The valid document for availment of Modvat credit after 01.04.1994 is the duplicate copy of invoice. Since the documents under reference were issued in the format of carrier copy (original copy) of gate pass, the same would not be admissible for availment of Modvat credit on inputs in June 1994. As regards the Modvat credit taken on sulphuric acid by the appellants, ld. JDR submits that such credit was taken on the strength of two types of documents. One of them was endorsed invoices of M/s Hindustan Copper Ltd. and the other was invoices issued by the dealer subsequent to the date on which the credit was taken. Ld. JDR submits that endorsed invoices are not valid duty -paying documents for the purpose of availment of Modvat credit as held by the Tribunal's Larger Bench in the case of Balmer Lawrie and Co. Ltd and Ors. Vs Commr. of Central Excise, Kanpur and Ors. [2000 (36) RLT 666]. On the admissibility of dealer's invoices, ld. DR submits that the said invoices were issued subsequent to the date on which the credit was taken. In other words, as on the date of taking credit, those invoices did not exist. In this view of the matter, according to ld. DR, the entire credit taken on sulphuric acid is not available to the appellants. He, therefore, prays for rejecting the appeal.