1. The appellant challenges the order dated 22.3.05, passed by the Commissioner (Appeals) holding that modvat credit was not admissible to the appellant on the basis of invoices relied upon by the appellant and upholding the order of the Assistant Commissioner confirming the demand of Rs. 1,03,703/- under Rule 57I of the Central Excise Rules, 1944, read with Section 11A of the Central Excise Act, 1944.
2. The appellant was a registered manufacturer of excisable goods falling under Chapter Heading 8419 of the Central Excise Act, 1985 and availing the benefit of modvat credit under Rule 57A of the said Rules.
3. On scrutiny of RT 12, it appeared to the Revenue that the appellant had availed modvat credit on the invoice issued by M/s. Bela Instruments for the goods manufactured by M/s. Bela Plastics. It appeared that the appellant had availed credit on the strength of invoices issued by the dealers who were not registered. Furthermore, credit was availed in respect of inputs for which necessary declaration under Rule 57G had not been filed. In respect of five show cause notices issued to the appellant, it was contended by the appellant that no registration certificate was issued to their suppliers of inputs on 20.7.94 but the supplier had already issued the invoices in accordance with Notification No. 15/94. After issuance of Trade notice dated 21.7.94, the supplier approached the department for registration certificate. It was the specific case of the appellant that all the invoices issued by the dealers between the date of issuance of the notification and the date of registration may be considered as valid documents for the purpose of modvat credit.
4. The adjudicating authority while considering the question of admissibility of modvat credit on the invoices issued, came to a finding that the appellant had availed credit on inputs for which declaration under Rule 57G was not filed and credit was availed on the invoices which did not bear their name. However, the contention regarding change of name from M/s. Pharmalab (Group) Marketing Agency to M/s. Pharmalab Engineering (I) Ltd. was accepted. Accordingly, a portion of modvat credit (Rs. 25,571) was held to be admissible.
However, it was found that the appellant did not produce any documentary evidence regarding registration of M/s. Bela Instruments as dealer. Therefore, the total modvat credit amounting to Rs. 1,03,356/- availed in said five cases on the strength of invoices issued by M/s.
Bela Instruments, Bombay was held to be inadmissible and liable to be recovered under Rule 57I of the said Rules.
5. Before the Appellate Commissioner, the contention of the appellant was that the invoices were issued by the electronic division of manufacturer namely M/s. Bela Instruments, which should be treated as manufacturer's invoices. It was contended that the manufacturer M/s.
Bela Plastics having its factory at 631, Vaibhav Industrial Estate, Sion-Trombay Road, Deonar, Bombay, had delivered the goods at Bombay.
Therefore, their electronic division namely, M/s. Bela Instruments, 46, Atlanta, Nariman Point, Bombay, was required to be treated as a dealer or depot. The Commissioner (Appeals) has recorded the contention that M/s. Bela Instruments was a division of M/s. Bela Plastics, and held that M/s. Bela Instruments was located at a different place. It was also held that the dealer/depot/trader was required to get registered by 31.12.94 in view of the Board Circular No. 76/76/94 dated 8.11.94, but no evidence was forthcoming to show that such registration was applied for in the name of M/s. Bela Instruments. It was, therefore, held that the invoices were not valid documents for availing modvat credit. Moreover, the appellant had also availed modvat credit issued by depot/division even after 31.12.94 without having proper Central Excise registration and, therefore, no modvat credit was admissible.
The learned Commissioner (Appeals) relied upon the decision of Hon'ble Supreme Court in Eagle Flask Industries v. CCE reported in 2004 (64) RLT 363 (SC), in which it was held that compliance with the requirement of Central Excise Notification, was not an empty formality and that it was foundation for availing the benefit under the notification. He also applied the ratio of the decision of the Tribunal in Ceat Ltd. v. CCE and Jayna Times v. CCE in support of his conclusion.
6. The learned Counsel for the appellant, finding that M/s. Bela Instruments was not a registered dealer, has taken a different course for his arguments and submitted that M/s. Bela Instruments and M/s.
Bela Plastics are one and the same because M/s. Bela Plastics was a proprietary concern and it had signed the invoices, which were issued in the name of M/s. Bela Instruments on behalf of M/s. Bela Plastics.
He also submitted that on the back of invoices, the particulars of factory of M/s. Bela Plastics were given. Moreover, the particulars of debit entry in RG 23 Part II were also mentioned, and the numbers of invoices written therein tallied with the invoice numbers appearing on the front page of the invoices. He also argued that since the goods were duty paid and used in the final products, the appellant was entitled to avail modvat credit for the duty paid on inputs. He also submitted that minor procedural infringements in the invoices were required to be over-looked in view of the Board's circular No.441/7/99-CX dated 23.2.99. The learned Counsel relied upon the communication dated 4.2.97 sent by the Superintendent of Central Excise to M/s. Bela Plastics, a copy of which was received by the appellant from M/s. Bela Instruments, in which the Superintendent had, with reference to letter No. C Ex/100/96-9 dated 4.2.97 informed M/s. Bela Plastics that, 'there was no prohibition under Rule 52A to use one's own trade name on the invoices so long as the registered person issues the statutorily - prescribed invoice'. It was stated in that letter that: "Hence, there is no problem in using 'Bela Instruments (proprietor Bela Plastics)' on your invoice." The learned Counsel also relied upon the decision of Punjab and Haryana High Court in CCE Delhi III, Gurgaon v. Myron Electricals Private Ltd. reported in 2007 (78) RLT 467 (P&H), pointing out from para 5 of the judgment that, in the context of Circular No. 441/7/99 dated 23.2.99 as well as Notification No. 7/99-CE amending Rule 57G of the Central Excise Rules, 1944, the Court had rejected the contention that there was a statutory requirement that the invoice should have been issued by the dealer from the premises registered with the Department. It is observed with reference to the said circular and notification amending Rule 57G that, 'if the goods were received on payment of duty and use thereof was verifiable, credit should not be denied merely on the ground that the documents did not contain all the particulars.' It is strange that the Superintendent of Central Excise should have promptly sent the communication dated 4.2.97 which on the face of it appears to be an attempt to support the case of the appellant. It would be proper for the department to inquire as to the genuineness of this communication which does not disclose the name of the Superintendent.
In any event, this subsequently issued communication can in no way assist the appellant.
7. The learned Authorized representative for the department supported the reasoning and findings of the authorities below and pointed out that the invoice was required to be issued as prescribed by the Circular of the Board issued on 8.11.94 to be a valid document for the purpose of allowing modvat credit. From para 4 of the said Circular 776/94-CX dated 8.11.94, it was pointed out that the invoice/document to constitute as a valid document for the purpose of allowing modvat credit was required to be issued by a manufacturer from his factory; a manufacturer from his depot; a wholesaler, distributor/dealer of the manufacturer; or an importer from his godown.
8. Modvat credit was said to be availed by the appellant on the invoices on the ground that they were issued by M/s. Bela Instruments.
It was division of the manufacturers M/s. Bela Plastics. The contention of the appellant, as recorded in para 4 and 6 of the impugned order, was that these invoices issued by M/s. Bela Instruments should be treated as proper documents for availing modvat credit and that during the relevant period, the depot was not necessarily required to be registered for modvat purposes. Admittedly, M/s. Bela Instruments was not registered as a dealer. Moreover, the invoices show different addresses of M/s. Bela Instruments, (46, Atlanta, Nariman Point, Bombay 400 002) and M/s. Bela Plastics, the manufacturers (631, Vaibhav Industrial Estate, Sion-Trombay Road, Deonar, Bombay). All the invoices bear the name of M/s. Bela Instruments. They were signed for M/s. Bela Instruments both on the front and at the back containing the particulars. They were signed for M/s. Bela Instruments below which it was written : (Prop. M/s. Bela Plastics). Since, all the invoices were signed for M/s. Bela Instruments and they bear the name of M/s. Bela Instruments, they cannot be construed as invoices issued by M/s. Bela Plastics, which was the registered manufacturer for excise purposes.
Below these invoices, there is an endorsement as under: I/we hereby certify that our registration certificate under the BST Act, 1959 is in force on the date on which the sales of the goods specified in this bill/cash memorandum is made by us and that the transaction of sales covered by this bill/cash memorandum has been effected by us in the regular course of our business.
M/s. Bela Instruments was, admittedly, neither a registered dealer nor a registered trader and all these invoices were issued in the name of M/s. Bela Instruments, which also given sales tax registration number of M/s. Bela Instruments below all these invoices of M/s. Bela Instruments. There is no dispute over the fact that M/s. Bela Plastics was the registered manufacturer. Since these invoices were not issued in the name of the registered manufacturer M/s. Bela Plastics and were issued in the name of M/s. Bela Instruments, which was having a separate office as noted above and was not in the factory premises, these invoices were rightly held to be invalid documents for the purpose of allowing modvat credit. It is only when the document was issued by the registered person that the question of minor procedural deviation could become relevant. These invoices do not conform to the requirement of the Circular dated 8.11.94. The modvat credit was therefore, rightly disallowed. There is no warrant for interference with the impugned order on the basis of any of the contentions raised by the appellant. The appeal is, therefore, dismissed.