TaxTMI 
TaxTMI 
2000 (1) TMI 74
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.....L.T. 468, C.C.E. v. Colour Coats, 1998 (26) RLT 403, Pearl Industries v. C.C.E., Raipur, 1998 (98) E.L.T. 745 (T) and M/s. Shiv Iron Brass Works v. C.C.E., New Delhi decided vide Final Order No. A/2095/96-NB, dated 22-8-1996 the Tribunal had taken the view that the invoices issued by the unregistered dealers were valid documents by holding that the Notification No. 32/94, dated 4th July, 1994 requiring registration of the dealer issuing the invoices, is only part of procedural law and not mandatory while contrary view has been taken in (1) Konark Cylinders & Containers Pvt. Ltd. v. Commissioner, (2) Poddar Udyog Ltd. v. Commissioner, 1997 (95) E.L.T. 438 (T) and (3) Jenny Plywood Industries Ltd. v. Commissioner, 1997 (96) E.L.T. 606 (T) wherein it has been held that the invoices issued by the unregistered dealer are valid documents for claiming Modvat credit even if he failed to get himself registered in terms of Notification No. 32/94, dated 4th July, 1994 and Board's Circular No. 76/94-C.E. (N.T.), dated 18-11-1994, upto 31-12-1994. 3.The necessity for making reference of second issue had arisen on account of conflicting/inconsistent views expressed by various Benches of ....
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....ly, 1994 regarding the registration of the dealer issuing the invoice under Rule 57G is mandatory as this condition had been prescribed only with a view to eliminate bogus, fictitious, benami traders from the commercial market and to bring more transparency in the trade and to avoid misuse of the Modvat credit schemes, therefore, the invoice issued by the unregistered trader cannot be accepted as valid documents for claiming Modvat credit under the Excise Law. 7.No doubt, prior to the issuance of the Notification No. 32/94, dated 4th July, 1994 the invoice/invoices could be issued under Rule 57G by a dealer of excisable goods irrespective of the fact whether he was registered or unregistered and Modvat credit on the basis of the same could be claimed under the Modvat Scheme on the inputs used or intended to be used in the manufacture of the final product, by the end user. But after the issuance of the above said Notification, substantive change had been brought in the earlier rule of law. The Notification No. 32/94 referred to above made it specific that the dealer of the excisable goods issuing the invoice, must be registered with the Central Excise Officer in order to make....
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....evenue department, after issuance of the Notification No. 32/94 -C.E., dated 4th July, 1994 and insertion of Section 57GG on its basis in the statute issued instruction bearing No. 76/94-C.E. (N.T.), dated 8-11-1994, authorising the Assistant Collector to accept the invoices issued by those unregistered dealers who subsequently procured registration by 31st December, 1994. But this relaxation obviously was given in order to avoid any genuine difficulty to the end user of the inputs having purchased the same under the invoices issued immediately proceeding the issuance of the Notification No. 32/94-C.E. by an unregistered dealer in claiming the Modvat credit on the strength of those invoices as in the original Notification the last date of registration by the dealer, was not provided. But this relaxation given by the Revenue department, cannot by any logic be interpreted to mean, as contended by the counsel, that the condition of registration of a dealer issuing invoices under Rule 57GG, for claiming Modvat credit, was never intended to make compulsory or mandatory, but only fell within the area of procedure which could even be deviated or violated by the dealer if it was show....
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....he is dealing is registered under the Central Excise Act. If he purchases the goods from an unregistered dealer, then he has to blame himself and not the Revenue department, when he is disallowed Modvat credit in respect thereof. He cannot be legally permitted to take the benefit of Modvat credit scheme for having simply shown that the goods had been used by him in the manufacture of the final product. The Revenue Officer in that case has no discretion or power to allow the Modvat credit and to waive the mandatory condition regarding registration of the dealer who issued the invoice to the end user of the goods under Rule 57G. 12.In the light of what has been discussed above, invoice/invoices issued by a dealer who had failed to get himself registered upto 31-12-1994 cannot be legally treated as a valid document under Rules 57GG, 57T and 52A for claiming Modvat credit. Consequently, the law laid down in Sandish Combine Pvt. Ltd. v. C.C.E., Pune, C.C.E., Chandigarh v. Colour Coats, Pear Industries v. C.C.E., Raipur, Bengal Safety Industries v. C.C.E., Shiv Iron & Brass Works to the contrary, cannot be held to be correct. 13.This takes us to the second issue. 14.The controv....
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.... the same had not been permitted by the Legislature. He has also contended that under the amended rules, the dealer has been permitted to issue fresh invoice if he wants to transfer the goods to a third party and specific proforma of the invoice had been prescribed for that purpose which is required to be filled in by him and as such no inconvenience can be said to had been caused by not permitting the endorsement of the invoices in the amended Rule 57G for claiming of the Modvat credit. Therefore, the endorsed invoice cannot be said to be valid document for claiming Modvat credit being not permissible under the Rules. 17.We have given our careful thought to the respective contentions and in our view the contention raised by the appellants cannot be accepted. No doubt, prior to 1-4-1994 and before the issuance of 15/94, dated 30-3-1994 when gate passes were considered valid Notification No. documents under which goods were cleared by the manufacture and also could be transferred by the dealer to a third party. But two endorsements of the gate passes were made permissible not on account of any provision to this fact in Rule 57G, as it stood at that time, but by virtue ....
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....ice to be issued has also been prescribed and that proforma is Annexure '2E' appended to the Central Excise Rules. The bare perusal of the proforma shows that the person issuing the invoice has to disclose his Central Excise Registration No., Sales Tax Registration No., Permanent Income Tax Account No., description of the goods, identification or mark Nos., if any, quantity, invoice No., date and time of issue of the invoice, or of transportation, rate and amount of duty charged, name and address of the buyer, Including Central Excise Range and Registration No., Sales Tax Registration, Permanent Income Tax Registration Nos. of that buyer. He has also given the names and addresses of his supplier or suppliers, from whom he received the excisable goods. All this has been provided with a view to bring transparency in the transactions and to avoid fraudulent, fictitious, bogus claim of the Modvat credit by those who had never received the goods except endorsed documents. Filling of this invoices proforma has been made mandatory and only that person can claim the Modvat credit who is in possession of the same after 1-4-1994. The amendment made after this date in Rule 57G is also quite s....
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....15/94, dated 30-3-1994 and the amendment language used in the Notification No. on its basis made in Rule 57G of the Central Excise Rules. Rather the language of the notification and the amended provisions of Rule 57G is quite clear and leaves no doubt in our mind that endorsement of the invoices had not been intended to be allowed by the legislature. Only the issuance of the fresh invoice by the dealer or trader after having received the goods from the manufacturer, had been made permissible under rule and that to on a prescribed proforma giving full details referred therein. If the intention of the legislative was to allow the endorsement of the invoices, as was earlier made permissible regarding the gate passes by the Board, such a provision must have been made in Rule 57G itself or by issuing a separate notification or circular by the Central Government. But having not so done it becomes quite clear that the endorsed invoices after 1-4-1994 cannot be legally considered to be valid document for claiming the Modvat credit. 19.The arguments of the learned counsel that by endorsement the invoice does not become invalid as it remains the invoice and that the duty paid ch....
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....king endorsement on the invoice by not maintaining the relevant record as required under Rule 57G or Rule 57GG referred to above, is condonable under the law. A distinction has to be made between a procedural condition of a technical nature and a substantive condition. It is the non-observance only of former which is condonable while that of later is not condonable as the same is likely to facilitate commission of fraud and introduce administrative inconvenience and misuse of the Modvat credit. 21.No doubt, the modern Courts/Tribunal seek to cut down the technalities attendant upon a statutory procedure where these cannot be shown to be necessary to the fulfillment of the purposes of the legislation. But in the instant case, no procedural technalities are involved which the Tribunal may allow to by-pass by the assessees. It is a substantive condition under Rule 57G that no Modvat credit shall be allowed unless the goods had been received under the cover of an invoice which does not include endorsed invoices as specific proforma of the invoice under which the goods have to be dispatched, has been introduced by the rule framers, on consideration of policy which is to avoid fic....