1999 (12) TMI 259 - AT - Central Excise

Tribunal considers validity of invoices for Modvat credit, seeks High Court opinion on pre-authentication rule

COMMISSIONER OF CENTRAL EXCISE, JAIPUR Versus UMA POLYMERS LIMITED

COMMISSIONER OF CENTRAL EXCISE, JAIPUR Versus UMA POLYMERS LIMITED - 2000 (118) E.L.T. 442 (Tribunal) Issues:1. Whether an invoice issued by a registered dealer without proper authentication can be considered valid for Modvat credit under Rule 57G.Analysis:The judgment in question revolves around the issue of whether an invoice issued by a registered dealer without proper authentication can be deemed valid for Modvat credit under Rule 57G. The Commissioner filed a reference petition highlighting the point of law arising from the Tribunal's order, specifically questioning the validity of such invoices for claiming Modvat credit. The Commissioner contended that pre-authentication of invoices was essential to prevent misuse and that failure to comply would disentitle the Modvat beneficiary from the benefits. However, the Tribunal, in a previous case, held that non pre-authentication of invoices could be rectified by the supplier and was not a fatal flaw. The Tribunal referred to previous decisions to support this stance, emphasizing that pre-authentication was a curable defect. Consequently, the Tribunal allowed the reference application, indicating a point of law for consideration.The case's background reveals that the appellants had claimed duty credit based on invoices lacking pre-authentication. The Assistant Commissioner initially ruled in favor of the appellants, but the Commissioner overturned this decision, asserting that pre-authentication was mandatory for claiming Modvat credit. However, the Tribunal, citing precedents, found that pre-authentication was a curable defect and should not bar Modvat credit. The Tribunal cited previous cases like Jenny Plywood Industries Limited, Ramgarh Chini Mills, and Jain Steel Industries to support its position. Notably, the Tribunal noted that from April 1, 1994, invoices issued by manufacturers became duty-paying documents, requiring pre-authentication to prevent misuse. Given the lack of clarity on whether pre-authentication was mandatory or a curable defect, the matter was referred to the Hon'ble Rajasthan High Court at Jaipur for a definitive opinion.In conclusion, the judgment delves into the crucial issue of the validity of invoices issued by registered dealers without proper authentication for claiming Modvat credit under Rule 57G. It highlights the differing perspectives on whether pre-authentication is a mandatory requirement or a rectifiable defect. The Tribunal's decision to refer the matter to the High Court for clarification underscores the complexity and significance of this legal question in the context of excise duty regulations.