TaxTMI 
TaxTMI 
2012 (4) TMI 254
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....dit other wise than in accordance with Rule 57G of the Rules?" Briefly stated the facts giving rise to the present appeal are as follows: The respondent-assessee, which is a public limited company, is engaged in the business of manufacture and sale of Aluminium and its products falling under Chapter 76 of the Schedule to the Central Excise Tariff Act, 1985. It availed Modvat credit under Rule 57A/57Q of the Central Excise Rule, 1944, hereinafter referred to as "the Rules". According to the Revenue, the respondent-assessee illegally and irregularly availed Modvat credit to the tune of Rs.6,67,26,672.83. Show cause notices were issued and after considering the reply filed by the respondent-assessee, the Assistant Commissioner, Central Excise Division, Mirzapur passed the orders confirming the aforesaid demand. Feeling aggrieved the respondent-assessee preferred appeals before the Commissioner(Appeals), Customs and Central Excise, Allahabad, who vide order dated 10th February, 2003 accepted the claim of the respondent-assessee to the extent of Rs.5,46,99,628.44. The Commissioner (Appeals), however, disallowed the Modvat credit of Rs.1,20,27,04.39. The respondent-assessee depo....
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....he respondent-assessee. Sri Shukla, learned Senior Standing Counsel for the Revenue, submitted that under sub-rule (2) of Rule 57G of the Rules production of duplicate copy of the invoice was the only mode prescribed for taking Modvat credit and as admittedly the Modvat credit was availed much prior to 9th February, 1999, the Modvat credit on Fabricated heaters/Fabricated tubes/Crab Assembly was inadmissible and the view to the contrary that it is only a procedural lapse is not correct. According to him, the amendment of the Rules 57G of the Rules vide Notification dated 9th February, 1999 would apply prospectively and, therefore, no benefit can be derived from the aforementioned amendment. He stressed that Modvat credit could be availed only on strict fulfilment of requirements stipulated in Rule 57G of the Rules and not otherwise. He referred to Section 5 of the General Clauses Act, 1897, to press home his plea that an enactment shall come into operation from the prescribed date. In support of his aforesaid plea he has relied upon the following decisions. 1. R.Kapilanath (dead) through L.Rs. vs. Krishna, AIR 2003 SC 565 2. Commissioner of Customs, Bangalore vs. Spice Tel....
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....es in question have paid the applicable central excise duty. The only defect/lacunae in the process of availing Modvat credit was that the invoice was not marked as 'duplicate'. Rest of the particulars mentioned in that invoice are not in dispute nor its correctness is being disputed by the Revenue. The question before us is as to whether Rule 57 G of the Rules should be taken as mandatory or directory and whether it provides for procedure for availing benefit of Modvat credit or is substantive in nature. For ready reference Rule 52A and Rule 57G of the Rules are reproduced below. 52A. Goods to be delivered on an invoice.-- (1) No excisable goods shall be delivered from a factory or a warehouse except under an invoice signed by the owner of the factory, or his authorised agent: Provided that when the excisable goods, other than those to which the provisions of Chapter VII-A apply, are removed on payment of duty such invoice shall be required to be countersigned by the proper officer. Explanation.--In this rule, and in any other rule, where the term invoice or gate-pass, as the case may be, is used it shall mean-- (i) assessee's own document such as invoice, challans, ad....
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....er conveyance. (5) Invoice shall be maintained in two sets-- (i) one for clearance for home consumption; and (ii) the other for clearances for export. (6) Each invoice shall bear a printed serial number running for the whole financial year beginning on the 1st April of each year. Only one invoice book of each type shall be used by a factory for removal of excisable goods at any one time unless otherwise specially permitted by the Commissioner in writing. (7) Each foil of the invoice book shall be authenticated by the owner or working partner or Managing Director/Company Secretary, as the case may be, before being brought into use by the manufacturer. The serial number of the invoice, before being brought into use, shall be intimated to the Assistant Commissioner of Central excise and dated acknowledgement of receipt of such intimation shall be retained by the manufacturer. Provided that the Commissioner may, by a general or special order, exempt an assessee or class of assessees from pre-authentication of each foil of invoice book and from intimating the serial number of the invoice. (8) If any person-- (a) caries or transports excisable goods from a factory....
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....ticated by the proper officer; (i) an invoice issued by an importer from his depot or from the premises of the consignment agent of the said importer provided the said depot or the premises, as the case may be, is registered under Rule 174 and duly authenticated by the proper officer; (j) an invoice issued by a first stage or second stage dealer of imported goods registered under Rule 174 and duty authenticated by the proper officer; (k) duplicate copy of a bill of entry generated on Electronic data Interchange System installed in any Customs or central Excise Commissionerate; (l) a certificate issued by the Superintendent of Central Excise or by the proper officer in the Customs area under Rule 57E; and (m) an invoice issued by a manufacturer of final product under sub-rule (3) of Rule 57F or sub-rule (1) of Rule 57S Explanation.--For the purposes of this section,-- (i) "first stage dealer" means a dealer who purchases the goods directly from-- (a) the manufacturer under the cover of an invoice issued under Rule 52A or Rule 100E or from the depot of the said manufacturer or from any other premises from where the goods are sold by or on behalf of the said manuf....
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....y time. (8) A manufacturer of final products shall submit within five days after the close of each month to the Superintendent of Central Excise, a monthly return indicating the particulars of the inputs received during the month and the amount of credit taken. The manufacturer shall also submit original duty paying documents and extracts of Part I and Part II of For R.G. 23A maintained along with the monthly return to the Superintendent of Central Excise, who shall after verifying their genuineness, deface such documents and return the same to the manufacturer: Provided that the Commissioner may, having regard to the nature, variety and extent of production or manufacture or frequency of removals-- (i) fix in relation to any assessee or class of assesses a period shorter than one month for filing the aforesaid return; (ii) permit that the aforesaid return may be filed by the assessee within a period not exceeding twenty-one days after the close of each month: Provided further that in respect of a manufacturer availing of any exemption based on the value or quantity of clearances in a financial year, the provisions of this sub-rule shall have effect in that financial....
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.... copy is the one to be used for taking credit under Rule 57G and Rule 57T. Vide Notification dated 9th February, 1999 Rule 57G of the Rules amended as follows: "2. In the Central Excise Rules, 1944,- (a) in rule 57G, after sub-rule (10), the following sub-rule shall be inserted, namely:- "(11) Credit under sub-rule (2) shall not be denied on the grounds that (i) any of the documents, mentioned in sub-rule (3) does not contain all the particulars required to be contained therein under these rules, if such document contains details of payment of duty, description of the goods, assessable value, name and address of the factory or warehouse; (ii) the declaration filed under sub-rule (1) does not contain all the details required to be contained therein or the manufacturer fails to comply with any other requirements under sub-rule (1); Provided that the Assistant Commissioner of Central Excise having jurisdiction over the factory of manufacturer intending to take credit is satisfied that duty due on the inputs has been paid and such inputs have actually been used or are to be used in the manufacture of final products, and such Assistant Commissioner shall record the ....
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....ocedural lapses as mentioned in the Notification without making proper enquiries. Wherever the Assistant Commissioner, after making enquiry due, is satisfied that the Modvat credit taken by the assessee is incorrect, adjudication proceedings in the normal course should be initiated. Efforts, however, should be directed toward reduction of litigation. 4. All pending cases may be disposed off accordingly. 5. Trade and field formations may be suitably informed." The question for consideration before us is whether Rule 57G is a mandatory provision and its amendment on 7.2.199 only prescribes the procedure for availing Modvat credit or creates any right. If it is former then the amendment shall apply retrospectively otherwise it shall be prospective in its operation. The basis of distinction between statutes affecting rights and those affecting merely procedure is well-recognised. Dixon, C.J. In Maxwell v. Murphy, (1957) 96 CLR 261, 267, drawing upon the following words of Lord Justice Mellish in Republic of Costa Rica v. Erlanger, (1876)3 Ch D 62, 69,said: "No suitor has any vested interest in the course of procedure, nor any right to complain, if during the litigation t....
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....Procedural law deals with the means and instruments by which those ends are to be attained. The latter regulates the conduct and relations of courts and litigants in respect of the litigation itself; the former determines their conduct and relations in respect of the matters litigated. '...What facts constitute a wrong is determined by the substantive law; what facts constitute proof of a wrong is a question of procedure.' '..So far as the administration of justice is concerned with the application of remedies to violated rights, we may say that the substantive law defines the remedy and the right, while the law of procedure defines the modes and conditions of the application of the one to the other'." In Izhar Ahmad Khan v. Union of India, 1962 Supp 3 SCR 235 it is observed: (SCR p.251) "The division of law into two broad categories of substantive law and procedural law is well known. Broadly stated, whereas substantive law defines and provides for rights, duties and liabilities, it is the function of the procedural law to deal with the application of substantive law to particular cases and it goes without saying that the Law of Evidence is a part of the law of procedu....
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....ra Sadasiva Sinai Narcornim, (1976) 2 SCC 917, the Apex Court laid down as follows:(SCC p.925, para 31) "Before ascertaining the effect of the enactments aforesaid passed by the Central Legislature on pending suits or appeals, it would be appropriate to bear in mind two well-established principles. The first is that while provisions of a statute dealing merely with matters of procedure may properly, unless that construction be textually inadmissible, have retrospective effect attributed to them, provisions which touch a right in existence at the passing of the statute are not to be applied retrospectively in the absence of express enactment or necessary intendment (see Delhi Cloth and General Mills Co.Ltd. v. CIT, AIR 1927 PC 242) The second is that a right of appeal being a substantive right the institution of a suit carries with it the implication that all successive appeals available under the law then in force would be preserved to the parties to the suit throughout the rest of the career of the suit. There are two exceptions to the application of this rule, viz., (1) when by competent enactment such right of appeal is taken away expressly or impliedly with retrospective ....
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....bodied in Rule 1-BB, namely, the method of capitalisation of income on a number of years' purchase value. The rule was intended to impart uniformity in valuations and to avoid vagaries and disparities resulting from application of different modes of valuation in different cases where the nature of the property is similar." "24. Rule 1-BB thus partakes of the character of a rule of evidence. It deems the market value to be the one arrived at on the application of a particular method of valuation which is also one of the recognised and accepted methods. Even if a law raises a presumption and renders the presumption irrebuttable it is yet in the domain of the law of evidence. In Izhar Ahmad Khan case, it was pointed out by this Court: (SCR pp.258-59) "It would be noticed that as in the case of rebuttable presumption, so in the case of an irrebuttable presumption, the rule purports to assist the judicial mind in appreciating the existence of facts. In one case the probative value is statutorily strengthened but yet left open to rebuttal, in the other case, it is statutorily strengthened and placed beyond the pale of rebuttal. Considered from this point of view, it seems rather di....
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....Excise Duty and enhancing rate of Basic and Additional Excise Duties on Cigarettes would come into effect from the date of issuance thereof i.e.25th March, 1985 by referring Section 38 of Central Excise Act, 1944 and Section 5 of the General Clauses Act. In the case of Kamakhya Steels (P) Ltd.(supra), the Tribunal had applied the amendment made in Rule 57G and 57T as per Notification No.7/99 dated 9th February, 1999 and the Circular dated 23rd February, 1999 and directed the Jurisdictional Assistant Commissioner to examine the admissibility of Modvat credit. In the case of A.B. Card Clothing (Pvt) Ltd.(supra), the Punjab and Haryana High Court has held that no substantial question of law arises where the Tribunal has given benefit of the amended Rule 57G (11) and 57 T(11) of the Rules and the Circular dated 23rd February, 1999. The same view has been taken by the Punjab and Haryana High Court in the case of JCT Ltd. (supra) We find that the Madhya Pradesh High Court in the case of Union of India vs. Kataria Wires Ltd., 2009 (241) E.L.T. 31 (M.P.), has held that the claim cannot be defeated in the cases where original and the duplicate copies are lost if the receipt of the ....
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.... and refund, it was held that there is a distinction between nonobservance of a procedural condition of a technical nature and nonobservance of a procedural condition of a technical nature and nonobservance of a substantive condition. Non-observance of procedural condition of technical nature is condonable, whereas non-observance of substantive condition would disentitle the assessee any exemption and refund under the Statute. In the present case, the Tribunal has held that there is no dispute regarding duty payment and use of goods in manufacture of final product and the credit has been denied only on the ground that necessary particulars were not mentioned in the invoices and the supplier, which issued those invoices, did not enter the particulars in their statutory records. The appeal has been allowed in view of the amendment made in Rule 57G and the Board's Circular, which was issued in light of the amended rules" Applying the principles laid down by the Apex Court in the aforesaid cases to the facts of the present case, we are of the considered opinion that the amendment made in Rules 57G of the Rules by insertion of sub-rule (11) vide Notification No.7/99 dated 9th Februar....