ORDER
K. Sankararaman, Member (T)
1. Appeal is directed against the order-in-appeal passed by the Commissioner of Central Excise, Allahabad upholding the order-in-original passed by the Assistant Commissioner of Central Excise, Division II, Kanpur. By his said order-in-original, the Assistant Commissioner had ordered recovery of Modvat credit amounting to Rs. 40,650/- availed by the appellant which was held to be not admissible to them. In addition, penalty of Rs. 5,000/-was imposed. This order was confirmed by the Collector (Appeals) on appeal by the appellant leading to the present appeal.
2. Shri Amit Awasthi, learned Counsel for the appellant submits that Modvat credit in question had been disallowed and the amount recovered from them only on the ground that they had taken the credit on the strength of duplicate copy of the invoice printed in white colour issued by the dealer from whom they had purchased the material in question. Central Board of Excise & Customs had issued Notification No. 23/95-C.E. (N.T.) prescribing the contents of the invoices and the colour. According to this Notification duplicate invoice should be of pink colour. In the present case appellant had taken Modvat credit on the strength of invoices in white colour and not in pink. It is the submission of the learned Counsel that such deficiency is purely procedural and it should not deprive of them the substantive benefit of Modvat, particularly when there is no allegation that the inputs in question were not duty paid or that the appellant not received them or utilised them in the manufacture of their final product. In this connection he cites Tribunal decisions in Rajasthan Transformers & Switch Gears v. Collector of Central Excise, Jaipur reported in 1995 (59) ECR 128. It is also pointed out by the learned Counsel that the subject requirement came into force on 1st August, 1995 and the invoices in question were issued on 8th August, 1995. This was the transition period immediately following the coming into effect of the new procedure as per the Notification. The appellant had purchased the goods from a small dealer who obviously had not got to know in time the new requirement in the matter of colour of the invoice which should be issued for transport purposes to enable the purchaser to avail Modvat. It had been pleaded by the appellant before the authorities below that necessary enquiry may be conducted with the dealer to satisfy themselves that the inputs covered by the disputed invoices were duty paid. Their request was not accepted. Shri Awasthi concludes his argument with the plea that the matter may be remanded to the Assistant Commissioner. Appellant had also produced a certificate issued by the dealer confirming that the material supplied by them to the appellant under the particular invoice had suffered proper excise duty and that the same had been originally received by them under duplicate/transporter’s copy of invoice issued by the manufacturer.
3. The arguments are opposed by Shri D.K. Nayyar, learned DR. He points out that the notification in question was issued on 30-5-1995 and it had been publicised through trade notices of the various Collectorates. Further this notification was printed in Volume 77 of Excise Law Times which was issued on 1st June, 1995. The notification actually came into force on 1-8-1995. Trade had sufficient time to note the requirement and fall in line with the same. The various requirements of the Public Notice regarding the contents, format and the colour of the form had been prescribed to plug the loopholes in the administration of Modvat particularly in view of the fact that there had been misuse of the facility and credit had Been taken unauthorisedly in a number of cases. The requirement in terms of the Notification in question was introduced to prevent such misuse. He refers to the judgment of the Supreme Court in Indian Aluminium Co. Ltd. v. Thana Municipal Corporation reported in 1991 (55) E.L.T. 454 wherein Supreme Court had referred to their previous decision in Kedarnath Jute Manufacturing Co. v. Commercial Tax Officer 1965 (3) SCR 626. In these decisions the importance of following the prescribed procedure by the person availing of a benefit had been strongly stressed. He concludes his arguments with the plea that the appeal may be dismissed.
4. I have taken note of the submissions made by both the sides. I have perused the record as also the judgments cited at the Bar. The Tribunal decision relied upon by the learned Counsel for the appellant related to a case where the Modvat declaration was in general terms and held by the department to be not specific enough to cover the inputs. Going by the liberalised approach spelt out by the Central Board of Excise & Customs vide their circular dated 9-2-1988 to regulate past cases, the Tribunal held that the substantial benefit of Modvat could not be denied on account of a procedural lapse. Such a finding has no relevance to the present case, where the requirement is in precise terms that the invoice on the strength of which Modvat credit is to be availed will be the duplicate copy meant for transporter which should be in pink form. I also find that trade had sufficient notice by the issue of the notification on 30-5-1995 in which it was made clear that the new requirement would come into force from 1-8-1995. The discipline proposed by the said notification was meant to streamline and regularise the procedure of availing of Modvat and to prevent possible misuse of the facility. In view of the specific requirement of the notification issued under Rule 57GG to regulate the Modvat utilisation the deviation adopted by the appellant cannot be condoned. The Modvat amount in question had been rightly denied by the lower authorities. However, in the circumstances of the case the imposition of penalty was not warranted. I accordingly set aside the penalty imposed on the appellant by the Assistant Commissioner which has been upheld by the Commissioner (Appeals). The impugned order is modified to this extent but is otherwise upheld. The appeal is allowed to the extent of setting aside the penalty and is dismissed otherwise.