ORDER
A.C.C. Unni, Member (J)
1. The appellants have filed this Appeal against the Order-in-Appeal passed by the Commissioner (Appeals), Central Excise, Bhopal dated 27-5-1998. The Commissioner (Appeals) in para-5 had recorded his conclusions as under :
“I have carefully gone through the records of the case and the submissions made by the appellant at the time of P.H. I found that the appellant took credit on the strength of invoices issued by registered dealer. The invoices on which credits were taken did not contain certain information like printed running serial No. as required and there was no mention of vehicle through which goods were transported to them. Therefore, it is a fact that the invoices on which credit was taken were not the valid documents under the Modvat rules. The facts of the case have cited are clearly distinguishable from the facts of the present case as lapses noticed were of substantive in nature and not procedural one as claimed by the appellant. Therefore, the impugned order passed by the Adjudicating Authority is legally correct and does not need any interference”.
2. Shri S.C. Shukia, Executive Engineer of the appellant electricity Board appeared before me and reiterated the Grounds of Appeal. I find that the appellants have challenged the impugned order mainly on the ground that they have complied with the substantive provisions of the Modvat rules and the reasons for not allowing Modvat credit to them were only technical lapses which was condonable. They have submitted that it is not in dispute that the inputs covered under the invoice had actually been received by the appellants and they have been utilised in the manufacture of the finished products. The inputs had also suffered the appropriate rate of duty which had been paid by the manufacturer. The particulars of the duty paid were available in the invoices. In many cases where only procedural lapse had taken place, the Tribunal had allowed credit subject to verification of the duty paid character of the inputs and other relevant particulars. Reliance has been placed on the Tribunal decision in Jain Kaliawala Engg. Works v. CCE 1994 (72) E.L.T. 908 (T.SRB) and some other decisions mentioned in the Grounds of Appeal. The thrust of the appellants, submission is that since they have complied with the substantive part of the modvat provisions, by way of receipt of inputs, proof of payment of duty by the manufacturer and utilisation of the inputs in the manufacture of the final products, deficiencies such as non-mention of the vehicle number or any discrepency in the actual quantity of goods transported through a particular truck should not stand in the way of allowing them modvat credit.
3. Ld. JDR, Shri Nayyar, on the other hand has drawn attention to the findings in the adjudication order passed by the Asst. Commissioner on 30-3-1997 which has analysed (para-6 of the order), the lapses and deficiencies in the invoices filed by the appellants for availing Modvat credit. He had noted that the dealers’ invoices did not contain the details of the mode of transportation, the registration number of the vehicle, the time of despatch of goods, all of which were required to be shown in terms of Notfn. No. 33/94, dated 4-7-1994 issued under Rule 57GG of the Central Excise Rules. The serial numbers given in the invoices were also found to be handwritten, and in some cases over written, which created doubts about the genuineness of the document. Further, the column meant for noting the details of the vehicle in the invoice had not been filled in by the supplier. The quantity of cement shown to be supplied to the assessee had also shown unrealistic quantity. All these factors went to show that the invoice on the basis of which credit has been claimed cannot be accepted as valid duty paying documents in terms of the aforesaid notification. He, therefore, submits that the impugned order does not call for any interference and the same may be upheld. He also pleads for confirmation of the penalty of Rs. 4,000/- which was quite reasonable in view of the wrong availment of credit of Rs. 78,830/-.
4. On consideration of the submissions of both sides and on perusal of the record, I find that the appellants have not disputed the findings of the Commissioner (Appeals). Their main argument is that the lapses were only of a procedural nature and since substantive provisions have been complied with, they should have been allowed Modvat credit, despite the lapses/deficiencies in the invoices. I find that the deficiencies in the invoices pointed out by the ld. JDR are not of a mere procedural nature. For example, there was no mention of the details of the vehicle which transported the goods, the time of despatch, etc. which were essential requirements under Notfn. 33/94.1 agree with the submission made by ld. JDR that in the absence of these details it would not be possible for the authorities to verify the actual receipt of the goods. In such circumstances, failure to give the details in the invoices cannot be taken as a mere procedural lapse. I am therefore of the view that disallowance of modvat credit and imposition of penalty was justified. The impugned order in relation to disallowance of modvat credit and penalty is accordingly confirmed.
5. In reply to a query from the Bench regarding 20% interest confirmed against the appellants under Rule 57-I(3), the Ld. JDR submitted that the said rule had come into force from 31-5-1995. Since the period during which the relevant invoices were issued was April – May, 1995, I am of the view that it is not a case where the interest as imposed in the adjudication order can be justified.
6. In the result, I confirm the duty demand of Rs. 78,830/- and penalty of Rs. 4,000/-. However, interest demanded on the said duty amount is set aside.
7. The Appeal is disposed of in the above terms.
