ORDER
M.V. Ravindran, Member (J)
1. This appeal is filed against order in appeal dated 19/05/2004 which upheld the order in original denying the modvat credit to the appellant.
2. The relevant fact that arise for consideration are the appellants had availed the modvat credit in the month of April, 1997. They could not produce the ‘duplicate copy for transporter’ to the authorities in respect of 9 (nine) invoices on which credit availed by them in the month of April, 1997. The authorities issued a show cause notice on 29/10/1997 proposing to deny the modvat credit on these invoices to the appellant. The appellant contested the show cause notice on the ground that they had received the consignment with duplicate copy of invoices but the same were misplaced in their factory or during the photocopying of invoices for submission to the authorities. The adjudicating authority confirmed the demand and also imposed penalty on the appellants. On an appeal, Commissioner (Appeal) also concurred to the views of the adjudicating authority and upheld the order. Hence this appeal.
3. The learned advocate appearing for the appellant submits that the receipt and consumption of the inputs covered under the 9 (nine) invoices is not in dispute, since it is not raised anywhere in show cause notice. It is his submission that the original copies of invoices are available with the appellant and they had sought permission from the lower authorities in reply to show cause notice for availing the modvat credit. It is his submission that they took efforts to lodge FIR, file affidavit and confirmation from the suppliers. It is also his submission that when they availed the modvat credit, the duplicate copy of invoice was available on the date of availing the credit, but unfortunately, they were lost. He relies upon the case of Sterling Machine Tools v. Commissioner of Central Excise, Kanpur as reported at 2006 (199) E.L.T. 626 (Tri.-Del.) and in the case of Commissioner of Central Excise, Jalandhar v. Amritsar Swadeshi Woolen Mills as reported at 2006 (199) E.L.T. 173 (Tri. – Del.) and in the Larger Bench decision in the case of Commissioner of Central Excise, New Delhi v. Avis Electronics Pvt. Ltd as reported at for the proposition that the modvat credit can be availed on the original copy of the invoices, if it is proved to the satisfaction of Assistant Commissioner that the duplicate copy was lost.
4. Learned DR on the other hand submits that to deal with these kind of issues, the rules have been made with remedies. It is his submission that the appellant should have applied for the permission for availing credit on the original invoices. It is also his submission that the appellant did not approach the authorities for guidance, if they do not approach it is not possible for the revenue to render help unsolicited.
5. Considered the submissions made at length by both sides and perused records. I find that in this case the issue is in very narrow compass. The appellant availed modvat credit on the invoices received from their suppliers. It is indeed a fact that they had taken the stand before the lower authorities that duplicate copy of invoices were available with the appellant on the date when they availed the modvat credit. It is also undisputed that the inputs covered under these 9 (nine) invoices were received and consumed by the appellant in their factory. The whole question boils down to the fact whether the duplicate copy of the invoices were lost? I find from the affidavit and FIR lodged by the appellant that they had made a clean breast of it and informed authorities that there was a loss. At the same time, I find that the appellant had not approached the lower authorities for the benefit of availing modvat credit on the original invoices as provided under Rule 57G(6). In order to appreciate, the correct provisions of Rule, it is read:
Notwithstanding anything contained in Sub-rule (2) a manufacturer can take credit of the inputs received in the factory on the basis of the original invoice, if the duplicate copy of invoice has been lost in transit, subject to the satisfaction of the Assistant Commissioner, that the inputs have been received in his factory and the duty was paid on such inputs.
5. From the plain reading of the said provisions as reproduced above, it is very clear that the appellant could have availed the modvat credit on the original copy of the invoices, subject to the satisfaction of the Assistant Commissioner. I find that the Larger Bench in the case of Avis Electronics Pvt. Ltd. (Supra) in paragraph ‘8’ had held as under:
In the light of the above finding arrived at by us on the question referred to us, we hold that insistence on document evidencing payment of duty on the inputs as prescribed by Rules is not a technicality to be complied with for availing Modvat credit. Observation made by the appellate authority that insistence on duplicate copy of invoice is purely a procedural requirement is against Rules so cannot be sustained. When a particular thing is directed to be performed in a manner prescribed by Rules, it should be performed in that manner itself and not otherwise. A combined reading of the provisions contained in the Rules makes it clear that a manufacturer who wants to take credit of the duty paid on inputs must base his claim on the duplicate copy of the invoice. In case the duplicate copy has been lost in transit, he can take credit on the basis of the original. This can be done only if he satisfies the concerned Assistant Collector about the loss of the duplicate copy in transit.
6. The judgment and order in the case of Avis Electronics Pvt. Ltd. is very clear that is to say that credit can be availed on the duplicate copy of the invoices but in case duplicate copies of the invoice being lost then on the basis of original copy of the invoices but subject to the satisfaction of Assistant Commissioner. I find that in this case lower authorities in their orders have not considered the affidavit filed by the appellant nor they have considered the FIR filed by them with the police regarding the loss and misplacing of 9 (nine) invoices, if they would have considered this affidavit and FIR, the lower authorities would have come to different conclusion, as to the fact that there was no dispute regarding receipt and consumption of the inputs covered under these 9 (nine) invoices.
7. Accordingly, to my mind, the appellants have demonstrated their bonafide by producing the affidavit and confirmation from their supplier in regarding the duty paid nature of the goads. If that be so, the lower authorities should have considered these corroborative evidence before denying the modvat credit to the appellant.
8. In view of the facts and circumstances, as mentioned above, the matter is remanded back to the original adjudicating authority to consider the matter afresh in light of the direction, as given above and in light of the settled law on the issue. Appeal allowed by way of remand.
(Dictated and pronounced in the open court)