In the matter of S.K. Foils Ltd. Versus Commissioner of Central Excise, New Delhi III [2009 -TMI - 33851 - PUNJAB AND HARYANA HIGH COURT] the following question was raised before the High Court:

"Whether on the facts and circumstances of the case, the Tribunal is right in disallowing the credit for Modvat on the carbon copy of the challans furnished by the petitioner evidencing payment of duty?"

Relevant Provision:

Rule 9 of Cenvat Credit Rules 2004 [Old Rule 57G]

Findings and Decision:

A perusal of the above provisions of the Rules shows that in order to claim Modvat credit the original copy of the invoice is required to be produced. There is no provision for granting Modvat credit on the basis of a carbon copy. If we presume that carbon copy in a case like the one in hand could be treated as original then the finding of fact by the appellate authority or Tribunal have to be on the record. In the present case the finding of fact is against the dealer that TISCO does not issue invoice on a carbon copy so as to be treated as original for the purpose of rule 57G of the Rules. The contention of the counsel for the assessee that carbon copy has been properly verified and defaced does not impress us as in the present case adjudication has to be only on the question of law. We find no merit in the contention raised by the learned counsel for the assessee. Moreover, laying down a blanket principle permitting Modvat credit on carbon copy may result into setting up of false claims. On such a principle the possibility of availing Modvat credit by many persons against one transaction would not be ruled out which will be highly damaging to the revenue.

Cenvat Credit is not allowed on Carbon Copy.

S.K. Foils Ltd. Versus Commissioner of Central Excise, New Delhi III [2009 -TMI - 33851 - PUNJAB AND HARYANA HIGH COURT]

Cenvat credit on carbon copy invoices is restricted when the original invoice requirement under credit rules is not met. The Cenvat Credit Rules require production of the original invoice to substantiate a Modvat/Cenvat credit claim; a carbon copy is not treated as an equivalent original absent a factual finding that the supplier issues invoices on carbon copies. Allowing carbon copies generally would risk duplicate claims against a single transaction and undermine revenue safeguards, so verification of a carbon copy does not meet the statutory evidentiary threshold where the original is required.