Appeal allowed for duty credit denial on capital goods due to missing transport docs. Proper procedures followed.

The appellant, a Public Sector Unit, was denied credit of duty paid on capital goods received from another Public Sector Unit due to missing transport documents. The court found that the denial was unjust as both units failed to follow proper procedures, and the goods were received under a transit challan within the specified time frame. The lower authorities' decision was overturned, and the appellant was granted the credit. The department was given the discretion to take action against any procedural violations.

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Issues: Denial of credit of duty paid on capital goods received from another Public Sector Unit.

Analysis:
1. The appellant, a Public Sector Unit, was denied credit of duty paid on capital goods received from another Public Sector Unit, BHEL. The goods were received on 17-8-1996. The appellant informed the Assistant Collector on 20-9-1996 that they had not received the transporters copy along with the goods. M/s. BHEL sent the original/copy of the excise duty gate passes to the appellants for the impugned goods. The goods were sent under the transit challan which allowed payment of duty within 30 days by the Commissioner.

2. The learned D.R. opposed the appeal, arguing that duty credit cannot be allowed as the goods were not accompanied by the duplicate copy of the invoice. Reference was made to the case law in CCE, New Delhi v. Avis Electronics Pvt. Ltd. - 2000 (117) E.L.T. 571 (Tri.) which dealt with the loss of the duplicate copy of the invoice.

3. After considering both sides and reviewing the case records, it was found that this was not a case of loss of the duplicate copy of the invoice. Both Public Sector Units did not seem to be following the laid down procedure regarding the issue of the duplicate copy for transport to cover the movement of goods. No action was taken by the department for the violation of the procedure. Since the impugned goods were received under a transit challan, utilized as prescribed, and the department was informed promptly after receipt, there was no basis for denying credit on the goods. The orders passed by the lower authorities were set aside, and the appeal was allowed. The department was given the freedom to take action for any rule violations by the concerned units. The appeal was allowed on the above terms.

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