2004 (2) TMI 256 - AT - Central Excise

Tribunal Rules: MODVAT Credit Claim Valid with Photocopies and Evidence Despite Lost Original Documents.

The Tribunal allowed the appeal by the appellants, ruling that they were eligible to claim MODVAT Credit under Rule 57A of the Central Excise Rules, 1944. ... Availability of MODVAT Credit u/s Rule 57A of the Central Excise Rules, 1944 - Duty paying documents - HELD THAT:- It has been the contention of the appellants from the very beginning, that the Modvat credit has been taken by them on the strength of the specified documents, which got misplaced afterwards and for the said reason the original copy of transport documents could not be produced by them for defacement purposes. In support of their contention, that they have received the goods, they had produced before the Department photocopy of the triplicate copy of Bill of Entry and photocopy of the transporter copy of the invoice/challan besides other documents. The very fact that they have produced photocopy of the duplicate copy of challan and triplicate copy of Bill of Entry, goes to show the .... of the specified documents on the strength of which credit had been taken by them. The decision relied upon by the learned S.D.R. mainly relates to the situation where the specified documents, such as duplicate copy of the invoice, is lost during transit. In such a situation, the Modvat can be taken by an assessee on the basis of original copy of invoice only after satisfying the Assistant Commissioner about the loss of the duplicate copy of invoice in transit. In the present matter, the specified copy of Bill of Entry and invoices have been misplaced after the receipt of the goods in the factory. Neither the receipt of the goods in the factory nor their use for the intended purpose nor the duty paid nature has been doubted by the Department. Thus, the appellants are eligible to take the Modvat Credit of the duty paid on the inputs. We, therefore, allow the appeal. Issues involved: Availability of MODVAT Credit u/s Rule 57A of the Central Excise Rules, 1944.Comprehensive Details:Issue 1: Availability of MODVAT CreditThe appeal filed by M/s. Matsushita Television & Audio India Ltd. pertained to the availability of MODVAT Credit under Rule 57A of the Central Excise Rules, 1944. The appellants manufactured television and audio systems and claimed MODVAT credit on duty paid inputs. The Department disallowed the credit as the appellants failed to produce duty-paying documents for defacement, even though they initially took the credit based on specified documents. The appellants submitted photocopies of duty-paying documents, transport and receipt documents, and an indemnity bond. They argued that the Department could have easily verified the receipt of goods and duty payment from Customs. The appellants' case was supported by precedents where similar situations were considered acceptable for MODVAT Credit.Issue 2: Department's PositionThe Department contended that MODVAT Credit can only be claimed when goods are received with specified duty-paying documents as per Rule 57G of the Central Excise Rules, 1944. As the appellants failed to prove the loss of documents and did not possess the required documents, the Department rejected the MODVAT Credit claim. Citing previous rulings, the Department emphasized the mandatory nature of Rule 57G and the need for strict compliance with document requirements for availing MODVAT Credit.JudgmentAfter considering both arguments, the Tribunal found that the appellants had initially taken MODVAT Credit based on specified documents, which were later misplaced. The appellants provided photocopies of relevant documents to prove receipt of goods. The Tribunal noted that the Department did not question the receipt of goods, their use, or the duty paid nature. Therefore, the appellants were deemed eligible to claim MODVAT Credit on duty paid inputs, and the appeal was allowed.This judgment highlights the importance of complying with specified document requirements for claiming MODVAT Credit under the Central Excise Rules, while also considering practical situations where documents may be lost or misplaced post-claim.