ORDER
P.G. Chacko, Member (J)
1. This appeal is against the order of the Commissioner (Appeals) disallowing Modvat credits totalling to Rs. 2,40,000/- on inputs to the appellants under Rule 57-I and sustaining penalty of Rs. 10,000/- imposed on them by the original authority under Rule 173Q. The impugned order was passed by the Commissioner (Appeals) upholding the common order-in-original passed by the original authority in adjudication of two show cause notices, one dated 22-5-95 and the other dated 26-5-95. In the show cause notice dated 22-5-95, the proposal of the department was to deny Modvat credit of Rs. 1,66,000/- to the assessee on the ground that the dealers’ invoices on the strength of which the credit was taken were not pre-authenticated and did not bear pre-printed serial numbers. In the show cause notice dated 26-5-95, it was proposed to disallow Modvat credit of Rs. 74,000/- on the same ground and on the further ground that the assessee had not produced evidence regarding intimation of serial number of the invoice to the jurisdictional Assistant Commissioner and had not requested for acceptance of the invoice in terms of Board’s Circular. The original authority sustained all the grounds and disallowed the Modvat credits to the assessee and imposed on them a penalty of Rs. 10,000/-. This decision of the adjudicating authority was upheld by the lower appellate authority. Hence this appeal of the assessee.
2. Heard both sides.
3. Ld. Counsel for the appellants submits that the Commissioner (Appeals) has accepted the assessee’s submissions in relation to pre-authentication of invoice and pre-printing of serial number on the invoice. Even otherwise, Id. Counsel submits, Modvat credit taken on the strength of invoice without pre-printed serial number is admissible to the assessee as held by Larger Bench of this Tribunal in CCE, Ahmedabad v. Satyen Dyes [2000 (134) E.L.T. 655 (T-LB) = 2001 (47) RLT 669]. Counsel further submits that the invoices in question were duly pre-authenticated, which fact was not properly appreciated by the authorities below. As regards the finding of the Commissioner (Appeals) that the assessee had failed to produce evidence regarding the intimation of serial number of invoice to the jurisdictional Assistant Commissioner, ld. Counsel submits that any omission to intimate serial number of invoice was only a fault, if at all, on the part of the dealer who issued the invoice. Such omission is no ground for denial, to the assessee, of the Modvat credit taken on the strength of the invoice. Referring to this finding of the Commissioner (Appeals) that the assessee had not applied for acceptance of the dealer’s invoice in terms of Notification No. 64/94-CE. (N.T.), ld. Counsel submits that the dealer who issued the invoice was a registered dealer as evidenced by the invoice itself. Notification No. 64/94-C.E. (N.T.) was applicable only to those dealers who remained unregistered with the department prior to 31-12-94. Ld. Counsel submits that the grounds stated by the lower appellate authority for denial of the Modvat credit are not sustainable. He submits that none of the lower authorities has a case that the inputs were not duty-paid or not received in the assessee’s factory and utilized in the process of manufacture of final products. The substantive requirements for availment of Modvat credit were duly satisfied by the assessee and hence the credit in question was admissible to them. Ld. JDR has sought to defend the impugned order on the strength of the findings of the Commissioner (Appeals).
4. I have examined the submissions. I find that the lower appellate authority has accepted the assessee’s contention that the Modvat credit in question was not liable to be denied on the ground that the invoices did not bear pre-printed serial numbers. Such decision of the Commissioner (Appeals) is well founded in the light of the Larger Bench decision in the case of Satyen Dyes (supra). The only ground on which the Commissioner (Appeals) has upheld the order of the original authority is that the assessee had not applied for acceptance of the invoices in terms of Notification No. 64/94-C.E.
(N.T.) and also had not produced evidence that the serial numbers of the in
voices had been intimated to the jurisdictional Assistant Commissioner.
These grounds are not valid grounds for denial of the Modvat credit inasmuch as the substantive requirements of Rule 57A were fulfilled by the assessee. The inputs were duty-paid and were received in the assessee’s factory
and utilized in the process of manufacture of final products. The inputs were
duly declared also. These facts are not in dispute. Considerations such as
non-intimation of serial number of invoice to jurisdictional Assistant Com
missioner are extraneous to the assessee’s right to take the substantive benefit
of Modvat credit under Rule 57A. Since the invoices were issued by registered dealers, the question of applying for acceptance of the invoices in terms
of Notification No. 64/94-C.E. (N.T.) did not arise. The order of the Commissioner (Appeals), therefore, cannot be sustained and the same is set aside.
The appeal is allowed.
