By the Court.—The present appeal has been filed under Section 35G of the Central Excise Act, 1944, hereinafter referred to as “the Act”, against the order dated 3rd December, 2003 passed by the Customs, Excise & Service Tax Appellate Tribunal, New Delhi and has been admitted vide order dated 11th April, 2007 on the following two substantial questions of law:

“(a) Whether Modvat Credit can be allowed on Invoices other than duplicate copies which, at the relevant time (November and December, 1995), was a mandatory requirement for availing Modvat Credit in terms of Rule 57G of the Central Excise Rules, 1944?”

“(b) Whether the Appellate Tribunal being a creature of the statute itself can allow Modvat Credit other wise than in accordance with Rule 57G of the Rules?”

Briefly stated the facts giving rise to the present appeal are as follows:

2. The respondent-assessee, which is a public limited company, is engaged in the business of manufacture and sale of Aluminium and its products falling under Chapter 76 of the Schedule to the Central Excise Tariff Act, 1985. It availed Modvat credit under Rule 57A/57Q of the Central Excise Rule, 1944, hereinafter referred to as “the Rules”.

3. According to the Revenue, the respondent-assessee illegally and irregularly availed Modvat credit to the tune of Rs. 6,67,26,672.83. Show-cause notices were issued and after considering the reply filed by the respondent-assessee, the Assistant Commissioner, Central Excise Division, Mirzapur passed the orders confirming the aforesaid demand. Feeling aggrieved the respondent-assessee preferred appeals before the Commissioner (Appeals), Customs and Central Excise, Allahabad, who vide order dated 10th February, 2003 accepted the claim of the respondent-assessee to the extent of Rs. 5,46,99,628.44. The Commissioner (Appeals), however, disallowed the Modvat credit of Rs. 1,20,27,04.39. The respondent-assessee deposited a sum of Rs. 1,13,63,610.07 and preferred an appeal for the balance amount of Rs. 6,63,434.00 before the Tribunal.

4. The items on which the respondent-assessee claimed Modvat credit was in respect of Fabricated heaters/Fabricated tubes and Crab Assembly (Rs. 4,21,316) PD Bowl Assembly (Rs. 45,000/-) and Refractory and Refractory Materials (Rs. 1,97,118/-). The Tribunal vide order dated 3rd December, 2003 had upheld the assessee’s claim of Modvat credit in respect of Fabricated heaters/Fabricated tubes/Crab Assembly and Refractory materials. However, in respect of the claim of Modvat credit relating to PD Bowl Assembly the Tribunal had remanded the matter for further verification.

5. It may be mentioned here that the Assistant Commissioner, Central Excise, Mirzapur had denied Modvat credit on Fabricated heaters/Fabricated tubes/Crab Assembly on the ground that the words ‘duplicate invoice’ was not mentioned and in one invoice, the portion showing the words ‘original and duplicate’ was torn and according to Rule 57G of the Rules, as it stood during the relevant period, Modvat credit could have been allowed only on furnishing of duplicate invoice and not otherwise. The Commissioner (Appeals) has also upheld the disallowance of Modvat credit on this ground. However, the Tribunal had held that after the amendment of Rule 57G of the Rules vide Notification No. 7/99-CE (NT) dated 9th February, 1999 the amended Rules would apply in all pending cases and the credit cannot be denied on minor procedural lapses in case the inputs were duty paid. The Tribunal, accordingly, held that the respondent-assessee is entitled for the benefit of Modvat credit in respect of Fabricated heaters/Fabricated tubes/Crab Assembly. So far as the Modvat credit on Refractory and Refractory materials is concerned, it was denied by the Assistant Commissioner and the Commissioner (Appeals)only on the ground that at the relevant period it was not covered under the definition of ‘capital goods’. The Tribunal has held that these items are used for lining of the furnace. The fur