Commissioner Of Customs, Meerut v. Triveni Engg. & Industries Ltd.

[Order]. - This appeal of the Revenue is against the order of the Commissioner (Appeals) allowing Modvat credit of Rs. 22,311/- on capital goods to the respondents for the period January-February, 1999. The original authority had disallowed the above credit on the ground that the same had been taken on the basis of an invalid document, namely, dealer’s invoice not pre-authenticated as required under Rule 57-G. The Commissioner (Appeals) however, allowed the credit holding that the minor procedural lapse should not stand in the way of the assessee availing the credit which was otherwise due to them. The appellate authority relied on the Board’s Circular No. 441/7/99-CX., dated 23-2-1999 which had clarified that credit of duty paid on inputs or capital goods was not to be denied on the ground of procedural defects in the Modvat declaration or the duty-paying documents.

2. Heard both the sides. The DR, relying the grounds of this appeal, submits that pre-authentication of invoices is a mandatory requirement under Rule 57-G(3)(h) of the Central Excise Rules, 1944. He seeks to distinguish the Tribunal’s decision in Vikrant Tyres [] relied on by the Commissioner (Appeals). Further, he relies on the following two decisions :-

Mittal Containers v. CCE, Meerut []

Multifilm Plastics v. CCE, Pune [2003 (58) RLT 1044]

The learned Counsel for the respondents relies on the Board’s circular ibid and the Tribunal’s decision in Vikrant Tyres (supra).

3. I have examined the submissions and the case law cited. It is found that, among the cited cases, the Board’s circular dated 23-2-1999 was considered only in the case of Vikrant Tyres (supra). The Board’s Circular directed the field authorities of Central Excise not to deny Modvat credit on inputs/capital goods on the ground of minor procedural lapse in relation to declaration or duty paying documents unless the authorities are satisfied that the goods had not suffered duty and/or were not used in the process of manufacture of final products. This circular was examined by a Larger Bench of this Tribunal in the case of Kamakhya Steels Ltd. [ (Tri. - LB)] wherein the circular was held to be applicable to pending cases. It is this very circular which was considered in Vikrant Tyres wherein it was held that an invoice should not be rejected for want of pre-authentication where the duty-paid nature of the inputs and the utilization of the goods in the manufacture of the final product were not in dispute. In the case cited by the DR, the Board’s circular was not considered. As rightly pointed out by the learned Counsel today, it is trite law that the Revenue cannot argue against a circular issued by the Board. In the result, the impugned order is affirmed and the appeal of the Revenue is rejected.