Decided on August 30,2000



S.L.PEERAN,MEMBER (J) - (1.)THIS is Revenue appeal against Order -in -Appeal No. 29/98 dated 22.6.1998 allowing Modvat credit in respect of capital goods on the basis of the invoice which had been returned to the manufacturer as it was addressed to Unit -I at Salem and the manufacturer had prepared a fresh invoice in the name of Unit -II at Rasipuram. The Revenue initiated proceedings on the ground that the invoice is not in the name of the second unit and they cannot change the unit's name by returning the invoice without the knowledge of the department. However, the same was negatived by the Commissioner (Appeals) and held the same to be curative defect and there is no irregularity in the whole transaction and there is no double supply of capital goods. Revenue contend in this appeal that as per Rule 52A of CE Rules, an invoice is a document prepared and used for sale or removal of excisable goods. In this case the invoice prepared and used is the one prepared in the name of Unit -I at Salem which had actually accompanied and reportedly destroyed later. The second set of invoice is the same serial number prepared without the knowledge of the department did not accompany the goods and it was prepared without the authority of law and hence cannot be treated as having been issued under Rule 52A as a proper document under this rule and hence not covered by Rule 57T as a valid document for taking credit.
Ld. D.R. prays for reversal of the order as documentation under Modvat credit is an essential ingredient for grant of Modvat and where there are fundamental defects in the documents, the same were not curable ones and the findings given that it is a procedural and technical lapse is not correct. He contends that only a correct document should accompany the goods and once the documents were defective and the same was replaced without the knowledge of the department, then it is a serious irregularity calling for denial of Modvat credit.

(2.)LD . Counsel submits that the nature of the present case has been examined in the case of Ramgarh Chini Mills Ltd. v. CCE [ : 1998 (103) ELT 65] wherein it has been held that where there is no pre -authentication of invoice and suppliers had made an attempt to rectify the defect and such rectification is a curable defect. It has been held that Modvat credit cannot be denied so long as the invoice has been rectified. He also submits that the invoices mentioned the Head Office's name; even in such cases the Modvat credit has been taken in the factory hen also the benefit cannot be denied. He submits that it is a detailed judgment and like circumstances, it would have bearing on the present. He contends that here is no allegation regarding supply of two sets of capital goods against the same invoice as there is no change in the number and it was only because the invoice showed the unit -I at Salem, and it was sent back for rectification and the same was duly rectified. Not intimating to department is a procedural lapse and can be condoned. On a careful consideration of the submission and perusal of the order, there is no allegation in the show cause notice or in the Order -in -Original that the first invoice was destroyed. The only allegation was the change of invoice was not permissible without the permission from the department and the initial invoice supplied showed the Unit -I, Salem which cannot be replaced by another invoice without the department's permission. The Commissioner has noted that there is no supply of two items and the same item has been supplied. The same item's invoice was corrected by proper authentication from the manufacturer Such pre -authentication and correction of invoice have been held to be curable defects as held in the case of Ramgarh Chini Mills Ltd. supra. The ground raised in the appeal are not in the nature of serious infirmity in the grant of Modvat credit. Therefore, there is no infirmity in the order and the findings are legal and proper and hence the Revenue appeal is rejected. Ordered accordingly
(Pronounced & dictated in open court).

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