ORDER
K. Sankararaman, Member (T)
1. When the appeal is called Ms. Rati Gogia, Assistant to the authorised representative Shri Yogesh Agarwal hands over a letter written by the latter requesting for the disposal of the appeal on the basis of the facts on record and the grounds of appeal raised in the appeal memorandum. It has further been stated that their case is squarely covered by the decision of the Tribunal in Parikh Chemical Industries v. CCE, 1997 (95) E.L.T. 598. This letter had been given when the appeal had been posted for hearing on 27-11-1997. The hearing was adjourned to today. It is now stated by Ms. Gogia that Shri Agarwal is held up in connection with the surgical operation being undergone by his brother and that he would be able to attend the hearing if it is adjourned to afternoon. As, however, I am not sitting in the Single Member Bench after 3.15 P.M. and as it appeared that the matter was amenable to disposal on a perusal of the record in view of the settled legal position on the subject, I am proceeding to dispose of the matter after hearing Shri A.M. Tilak, learned JDR.
2. Appellant had taken Modvat credit in respect of one of the inputs, caustic soda lye on the strength of a consignment note issued by the manufacturer, M/s. Punjab Alkalies and Chemicals Ltd. (PACL) which had been issued by them to their distributor M/s. United Alkalies & Acids Pvt. Ltd. who endorsed it in their favour. Thus as far as the appellant is concerned the supply has to be taken as having been made by M/s. United Alkalies. They also issued an invoice in favour of the appellant. These documents have been held to be not valid duty paying documents to enable the appellant to take Modvat credit on the strength thereof. Thus, as far as the invoice issued by M/s. United Alkalies is concerned, it was held they could not have issued an invoice in respect of consignment which they did not receive in their godown but has diverted the supply from the manufacturer to the appellant. There is no dispute that the entire quantity covered by the manufacturer’s consignment note was made over to the appellant. As far as the other document, namely, the consignment note of the manufacturer is concerned, the objection was that it was not issued in favour of the appellant mentioning the name of the distributor but that it was issued to the distributor, namely, M/s. United Alkalies. Thus, between the two documents, the case of the appellant had been held to be invalid as far as the entitlement to Modvat credit is concerned. The deficiency in regard to both these documents which have been considered by the authorities below was highlighted by Shri Tilak while arguing the case in favour of Revenue. He also submitted that the decision cited in the letter sent by the learned Representative was not actually applicable to the present case. That was a case regarding the duplicate copy of the invoice which requirement was introduced in Rule 57GG only w.e.f. 19-1-1995. As the said case related to a period prior to 19-1-1995, the benefit of Modvat credit had been allowed in that case in the case of original duty paying document. That situation does not arise in the present case. It was accordingly pleaded by him that the impugned order may be sustained.
3. I have noted of the submissions. I have perused the record. I find that there is no adverse finding by the authorities below that the consignment of the input in question had not been received in the appellant’s factory or that it had not been used in the manufacture of their final product. The disallowance of Modvat credit is only on the ground of the documents produced by the appellant not being held to be the duty paying documents as laid down in Rule 57GG and 57G. Moreover the alleged irregularity had taken place in 1994 when the new procedure dispensing with the gate pass procedure was introduced. Instead, invoices issued by the manufacturers or registered dealers became the duty paying documents for availing Modvat credit. The invoices issued by the dealer in this case has been rejected on the ground that the supplier of the goods to the appellant did not have a godown and that he had sold the goods in transit. This requirement of receiving the goods in the godown and selling the same thereafter has been dispensed with subsequently. It cannot be taken that this type of relaxation cannot be taken to be applicable prior to the said relaxation. Even as regards the other objection that the manufacturer should have issued the invoice or consignment note directly in favour of the appellant who is the ultimate consignee and that the name of the distributor or dealer should have been mentioned there is also a procedural requirement, the non-conformity with which should not deprive the appellant of the substantive benefit granted under the Modvat Scheme. In this connection I take note of the finding of the Tribunal in Bengal Industries v. Collector of Central Excise, Calcutta-L 1997 (92) E.L.T. 81 which is reproduced below :-
“6…The Govt. had recognised the difficulties faced by the trade and industry arising out of Notification 32/94-C.E. & 33/94-C.E., dated 4-7-1994. It is in that view that circular dated 8-11-1994 was issued as also legal backing was given by amending Rule 57H as pointed out by the appellants. The circular as well as the legal backing alleviated some of the difficulties faced in the trade and industry. I also accept the proposition of the appellants that the requirements under Notifications 32/94-C.E. and 33/94-C.E. are merely procedural requirements and no more. In view of settled position of law that a substantive benefit, allowing the Modvat credit here, cannot be denied on merely procedural deviations, particularly created by the Government for whatever reason and the transition period having already been prescribed up to 31-12-1994.1 do not see any reason why the benefit of such invoices issued by dealers who have not registered themselves with the authorities subsequently should not be allowed. As rightly pointed out, the registration of dealers is not in the control of an assessee. If such a view as I have taken above is not conceded then the assessee who acted on understanding of law existing before the percolation of Notification 32/94-C.E. and 33/94-C.E. downwards would be left in lurch for no fault of his.”
The above decision related to a case of registration of dealers. The principle adopted by the Tribunal in the aforesaid decision would equally apply to the present case where the alleged irregularity relates to a situation of the dealer who had received the goods from the manufacturers forwarding the same to the appellant without storing it in his godown for the simple reason that he did not have such a godown. The facts of the case justify suitable relaxation. It is also seen that under the amended Rule 57H and the instructions issued by the Board to the field formations, the Assistant Collector was empowered to consider suitable relaxation with regard to documentation if he was satisfied that the goods had been received and had been utilised in the manufacturing process for entitlement to Modvat credit. The present case is a fit case for considering such relaxation which apparently had not been considered by the Assistant Collector as no application under Rule 57H is also reported to have been filed by the appellant.
4. For the reasons stated above, I am satisfied that the deficiency in the documentation does not vitiate the case of the appellant for availment of the credit. I hold accordingly and set aside the impugned order.
5. The appeal is allowed.