1998 (11) TMI 429 - AT - Central Excise

Tribunal allows Modvat credit despite procedural lapses, emphasizes adherence to Central Excise Rules

The Tribunal ruled in favor of the appellant, M/s. Pradhan Laminators Ltd., allowing Modvat credit for a part consignment received under an endorsed gate ... Modvat/Cenvat - Capital goods Issues Involved:1. Availability of Modvat credit under Rule 57A for part consignment received under endorsed gate pass.2. Availability of capital goods credit under Rule 57Q in case of non-sending intimation of receipt under Rule 57T(2) to the Superintendent.Issue 1: Modvat Credit for Part Consignment:The appellant, M/s. Pradhan Laminators Ltd., appealed against the disallowance of Modvat credit amounting to Rs. 1,48,691.43 ps for a part consignment received under an endorsed gate pass. The Additional Commissioner and Commissioner (Appeals) upheld the disallowance, citing procedural violations regarding subsidiary gate passes. The appellant argued that they followed the prescribed procedure and provided evidence of receiving the inputs in original packing from the supplier. They relied on previous tribunal decisions emphasizing that procedural lapses should not disentitle the assessee from availing Modvat credit. The Tribunal agreed that procedural issues should not deny substantive benefits and ruled in favor of the appellant, allowing the Modvat credit based on the endorsed gate passes.Issue 2: Capital Goods Credit for Non-Filing Intimation:The appellant also contested the disallowance of capital goods credit amounting to Rs. 3,201/- due to not filing intimation of the receipt of capital goods under Rule 57T(2). The Commissioner (Appeals) upheld this decision, stating that non-furnishing of intimation hindered timely departmental inquiry. The appellant argued that the submission of RG. 23 Part II along with RT-12 Return served as intimation, and any omission was merely procedural. They cited a tribunal decision emphasizing that procedures should further justice, not impede it. The Tribunal agreed that the failure to file the intimation was a curable defect, and the denial of capital goods credit was unjustified. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant.This judgment clarifies the importance of following prescribed procedures while also emphasizing that procedural lapses should not hinder the rightful availment of credits under the Central Excise Rules. The Tribunal's decision highlights the distinction between substantive benefits and procedural requirements, ensuring that administrative efficiency does not unjustly deny legitimate claims.