2006 (2) TMI 339

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....ers of excisable goods and are availing Modvat credit under the relevant rules. It was found that they had availed credit on the invoices which were invalid. M/s. Bellary Steel and Alloys Ltd. (BSAL) who issued the invoices to the appellants had misdeclared the description of the goods. In the Modvat invoices the description given is 100 x 100 mm whereas the actual goods received by the appellants were billets of 125 x 125 mm only. The supplier actually purchased the billets of 125 x 125 mm from M/s. Rashtriya Ispat Nigam Ltd., (RINL) Visakhapatnam. The goods were transported directly to the appellants factory without going to the original purchaser BSAL. BSAL were showing the receipt of their goods in their factory and availed credit in th....

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.... goods were accompanied by central excise invoice along with delivery Challans. The appellants availed Modvat credit on the basis of duplicate copies of invoices payment was made to BSAL though proper banking channels namely through cheque or through letters of credit. Even though documentary evidence was filed before the Commissioner, he has not considered the same. (3)     In terms of Rule 173Q(bb) read with explanation given thereunder that a person availing of credit of duty on inputs received by him shall be deemed to have taken reasonable steps if he satisfies himself about the identity and address of the manufacturers or supplier, as the case may be, issuing the invoice or any other document approved under thes....

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....not be found to be a reason to visit the appellants with a penalty as arrived at by the learned Commissioner." Since, the party who followed the irregular procedure has been exonerated and their appeals have been allowed, it is not correct to deny Modvat credit to the appellants for no fault of theirs. (5)     In view of the above submissions, the learned Advocates requested the Bench to allow the appeals. The learned SDR reiterated the orders of the lower authorities and relied on the Larger Bench decision in the case of Balmer Lawrie & Company v. CCE, Kanpur - 2000 (116) E.L.T. 364 (T) wherein it is held that Modvat cannot be allowed on invalid documents. In fact, this point has been elaborately dealt with in the ab....