ORDER
Gowri Shankar, Member (T)
1. By the order, which is the subject matter of this application, the Tribunal set aside the order of the Commissioner (Appeals) dismissing the appeal before him for failure to deposit Rs. 3 lakh subject to the condition that the assessee deposit Rs. 4 lakhs within a month from the receipt of its order. The Tribunal recorded a prima facie view that the dealer who issued the invoices on the basis of which modvat credit was taken by the appellant before the Tribunal had not been registered at that time. The invoices were issued. The invoices were issued in July and August 1994 and the Tribunal come to its conclusion, after considering a certificate dated 15.3.1995 issued by the jurisdictional Superintendent of Central Excise granting registration to the dealer. The applicant now contends that the dealer had been registered in July 1994 and the document that was cited before the Tribunal was only a renewal of that registration.
2. While replying to this point, the Joint Chief Departmental Representative points out that major part of the demand arose not on the ground that the credit was taken on invoices issued by an unregistered dealer, but on the ground that they were not in conformity with the requirement contained in notification 15/94. Out of the amount demanded from the assessee of Rs. 4.28 lakhs, Rs. 3.56 lakhs was on this account and only the remainder on the ground that the dealer was not registered.
3. This being the case, it is clear that the Tribunal has proceeded on an incorrect basis and the order therefore has to be and is hereby recalled.
4. The counsel for the appellant submits that the major part of the demand arises from a notice which furnishes no specific explanation to its ground. He says that the notice does not indicate how and in what particular invoices were not in conformity with the requirements of notification 15/94 and requests that the appeal at least on this ground may be disposed of.
5. The Joint Chief Departmental Representative contends that he is not able to show the existence of specific ground in the notice in support of the claim that the invoices were not in conformity with the notification 15/94 but says that it is clear from the order of the Assistant Commissioner that the reason disallowing the credit is that the dealer did not purchase the goods directly from the manufacturer as required under the notification. He further relies upon the judgment of the Supreme Court in CCE, Chandigarh v. Smithkline Beecham Co Health C. Ltd 2003 (58) RLT 479 in order to say that this Tribunal only remanded the matter to the Commissioner (Appeals) and cannot go into the merits.
6. After hearing both sides, I propose to take up the appeal. The notice issued to the appellant alleged taking of wrong credit of Rs. 3.36 lakhs on the ground that the traders on whose invoices credit was taken were not authorised to issue invoices as per the provisions of notification 15/94. Hence the credit taken on the strength of such invoices was not in accordance with the provisions of Rule 57G. Notification 15/94 issued by the central government in exercise of the powers conferred in Rule 57G prescribes invoices to be issued by a manufacturer from its factory or depot, or a wholesale distributor or dealer of a manufacturer who bought excisable goods either from the manufacturer factory or from the manufacturer’s depot or the importer from his godown contained in the notification to be a valid document for the purposes of the Rule. There is no specific authority conferred on any dealer either by notification or any other law to issue invoices. Therefore, any dealer could issue such invoices. The notice does not indicate that the dealers in question were not authorised to issue the invoices. There is no specific requirement in the notification authorising a dealer. Rule 57G authorised the Central Government to prescribe documents which would be valid for taking credit. If the document issued by a dealer were invalid either for the reason that he was not a dealer within the scope of the notification, the notice should have clearly indicated why this was so. In the absence of such particulars, it could not be expected of
the assessee to know the department’s intention and then set up its reply that the Assistant Commissioner adjudicating on a notice might have furnished the reason is no answer. The assessee’s right to defend its case before the Assistant Commissioner was severely prejudiced for want any details in the notice. In the absence of even the basic particulars, the notice cannot be sustained.
7. No doubt, as the Joint Chief Departmental Representative says, it is not generally open to the Tribunal to go into the merits of an issue in an appeal against the order of the appellate authority dismissing the appeal before him at the threshold. This is for the reason that in such a situation, the order of the lower authority has not merged with the order of the appellate authority below the Tribunal and therefore the merits of the issue are not before the second appellate authority. However, where the merits of the issues are already settled by a higher court, it is not illegal or improper for the Tribunal to apply the ratio of that judgment to decide the appeal. If the issues are already settled, sending the matter back to the Commissioner (Appeals) solely for him to apply the ratio of that judgment would be an exercise unnecessary. It is also settled law that it is for the courts to avoid the multiplying the proceedings. In such a situation therefore there is nothing improper or illegal in the Tribunal disposing of the appeal. Therefore, so far as the demand for Rs. 3.56 lakhs is concerned I allow the appeal and set aside the impugned order.
8. The remaining demand is on the ground that the dealer was not authorised to issue invoice, not having been registered. The evidence produced by the counsel for the appellant prima facie indicates that the dealer was registered when he issued the invoices. The certification of registration that he produced was in the possession of the department. However, the certificate was not produced before the Commissioner (Appeals). I think it appropriate for him to see it. So far as this demand is concerned, I set aside the order and remand the matter back to the Commissioner (Appeals) for deciding, the appeal on merits.
9. The appeal is allowed in the above terms.