TaxTMI 
TaxTMI 
2010 (10) TMI 799
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....er the learned Appellate Tribunal has correctly allowed the Modvat Credit to the respondent on the basis of documents, which were not merely invalid in certain terms, but were also not legal and genuine as the consignor had knowing fully well that the provisions of Cenvat Credit Rules had entrusted upon them the responsibility of passing on the genuine credit of duty, had passed on the irregular credit to the Respondent? 2. Briefly stated, facts of the case as projected in the Order-in-Appeal passed by the Commissioner (Appeals), are that the respondent availed input Modvat credit amounting to Rs.22,81,835/- and Rs.30,57,032/- on the strength of invoices issued by Mis Bharat Petroleum Corporation Ltd., Vishakhapatnam (in short "the supplier") during the months of November, 1995, September, 1995 and January, 1996. Eight show-cause notices were issued by the Revenue for disallowing credit on the ground detailed in the notices, and the Adjudicating Authority disallowed credit amounting to Rs.15,67,942/- on the invoices dated 6.8.1995, 10.6.1995 and 9.7.1995 and Rs.6,74,209/- on the invoice dated 29.6.1995, and imposed penalty of Rs.1 lac and Rs.15,000/- respectively. The Commi....
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....he ground of procedural lapses on the part of input supplier. There was no dispute regarding payment of duty on the inputs and its utilization in the manufacture of final product by the respondent. From perusal of the three show-cause notices issued in March and May, 1996 for disallowing Modvat credit, it would be evident that the department's contention was that the invoices were not proper documents as prescribed under Rule 57G of the Central Excise Rules (in short "Rules"). However, show-cause notices did not dispute that the supplier had paid duty on the furnace oil and the said furnace oil was actually received by the respondent and used in manufacture of dutiable final product. The Central Government vide Notification dated 9.2.1999 amended Rule 57G of the Rules and inserted sub-rule (11), which provides that the duty should not be denied to an assessee on the ground that any document referred to in sub-rule (3) does not contain the particulars required to be contained therein. If the documents contain the details of payment of duty, description of goods, assessable value, name and address of the factory or the warehouse and if the inputs received were duty paid and they have....
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....e 57G by the Central Government and insertion of sub-rule (11). 7. The objection raised by the Superintendent, Central Excise Range-1, Vishakhapatnam, is confined to the limited technical lapses on the part of the supplier in maintaining its RG 23D Register and in not submitting duplicate copy of the invoices raised by the respondent in the Range Office. The department has not disputed that the supplier has paid duty on the HSD Oil supplied to the respondent or that the invoices raised by the supplier did not contain the details of payment of duty, description of goods, assessable value, name and address of the factory or the warehouse. The lapses, if any, are on the part of the supplier for not complying with the provisions of Rule 57GG and the same cannot be a ground for denial of Modvat credit to the respondent. The department, without initiating any proceedings against the supplier for lapses on their part under Rule 57GG and without joining the supplier as a party, have initiated proceedings against the respondent, which is not tenable. It is further submitted that decision of the Hon'ble Supreme Court in the matter of Mangalore Chemicals and Fertilizer Ltd. (s....
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.... by the Tribunal that nowhere in the show cause notice it has been alleged by the Department that Lean Gas is a final product. Ultimately, an assessee is required to reply to the show cause notice and if the allegation proceeds on the basis that Lean Gas is a by-product, then there is no question of the assessee disputing that statement made in the show cause notice. 11. In the instant case also, the respondent was served with show-cause notices with the only allegation that the invoices furnished by the assessee were found to be tampered with. There was no allegation in the show-cause notices that necessary particulars, as required under Rule 57G, were not available in the invoice or that the supplier had not paid duty on the product and that the respondent received the product in its premises in the mentioned quantity and the same was not used or was not to be used for manufacture of final dutiable product. From bare perusal of sub-rule (11) of Rule 57G, inserted by amendment dated 9th February, 1999, it is manifestly clear that credit is not to be denied under sub-rule (2) on the ground that any of the documents mentioned in sub-rule (3) does not contain all the particul....