MODI XEROX FINANCIAL SERVICES LTD. Vs. CCE

JUDGEMENT

(1.) THE issue involved in this appeal, filed by Modi Xeros Financial Services Ltd., is whether MODVAT Credit of the duty paid on inputs is available to them on the basis of invoices which are not complete in all respects.

(2.) SHRI B.L. Narasimhan, learned Advocate, submitted that the appellants manufactured developers and availed benefit of MODVAT Credit; that they received two consignments of coated carrier from M/s. Modi Xerox Ltd. under invoices dated 16.11.1994 and 15.12.1994; that the impugned inputs had been imported by M/s. Xerox Ltd. and they had issued the importers' invoice to the appellants for the purpose of availing the MODVAT Credit; that the MODVAT Credit has been disallowed to them on the ground that in respect of invoice dated 16.11.1994, the goods had been despatched on 20.10.1994 and as such, the invoice dated 16.11.1994 is not valid for MODVAT Credit; that, further, the invoice did not contain the registration number of the consigner, mode of transport, vehicle number, time of removal of goods, PLA/GR 23A Part II debit entry, etc.; that, similarly, credit had been disallowed on the basis of invoice dated 15.12.1994 as it had not been issued according to the provisions of Notification No. 32/94 and 33/94 both NT. The learned Advocate, further, submitted that the show cause notice sought to deny the MODVAT Credit on the ground that the invoices were not valid duty -paying documents since they did not contain details as required under Rule 57G or 57GG of the Central Excise Rules, 1944; that, therefore, the finding that invoice dated 16.11.1994 is not a valid document, is beyond the purview of the show cause notice; that not containing certain details, such as the vehicle number, mode of transport, etc., does not debar the appellants from availing the MODVAT Credit inasmuch as there is no dispute with regard to the receipt of the goods into the factory of production and the duty paid nature of the goods. He also relied upon the decision of the Larger Bench of the Tribunal in the case of Kamakhya Steels (P) Ltd. v. CCE .

(3.) WE have considered the submissions of both the sides. It has not been the case of the Revenue that the inputs were not received by the appellants. They have also not disputed the duty -paid nature of the inputs. The MODVAT Credit has been disallowed on account of procedural lapses ignoring the subsequent amendment made in Rule 57G of the Rules by a Notification No. 7/99 -CE (NT) dated 9.2.1999 and Board's -CX dated 23.2.1999. By this Notification, Sub -rule (11) was inserted in Rule 57G of the Central Excise Rules, 1944 which provides that the credit is not deniable on the ground that the novice does not contain all the particulars required to be contained therein under the Central Excise Rules. The Board has also issued Circular dated 23.2.1999 extending the provisions of Notification No. 7/99. It is mentioned in the circular that the Notification has been issued to empower the Assistant Commissioner to allow the credit of duty paid on inputs ignoring minor procedural lapses in the invoice based on which the credit is to be taken provided he is satisfied that the inputs have suffered duty and are being used in the process of manufacture. As the receipt of the inputs and duty paid nature and their use have not been disputed by the Revenue, the MODVAT Credit cannot be disallowed on account of procedural lapses. We, therefore, set aside the impugned Order and allow the appeal.