2004 (11) TMI 377 - AT - Central Excise

Demand - Accounts and records, irregular maintenance - Evidence - Cenvat/Modvat - Invoice, authentication of - Demand - Cenvat/Modvat - Excesses and shortages

Summary

Issues Involved:
1. Demand of excess amount under Section 28B(1) of the Customs Act, 1962.
2. Imposition of penalty under Rule 173Q(1)(bbb).
3. Irregular availment of CENVAT credit.
4. Validity of invoices for CENVAT credit.

Issue-wise Detailed Analysis:

1. Demand of Excess Amount under Section 28B(1) of the Customs Act, 1962:
The appellants, M/s. Omega Petro Products (P) Ltd. (OPPL), were issued a Show Cause Notice demanding payment of Rs. 5,01,378/- for excess CVD collected but not accounted for. The department proceeded against OPPL for failing to produce evidence of CVD payment for the entire amount. The Tribunal noted that OPPL had provided details of all Bills of Entry under which SK was imported. Despite some irregularities due to the closure of their office, the Tribunal was satisfied that all SK supplied to M/s. Travancore Titanium Products Ltd. (TTP) was duty paid. Hence, the demand of Rs. 5,01,378/- was set aside.

2. Imposition of Penalty under Rule 173Q(1)(bbb):
The appellants were penalized for not maintaining the RG 23D Register properly. The Tribunal upheld the imposition of penalty, acknowledging that the register was not maintained correctly, and thus, the penalty was just and proper.

3. Irregular Availment of CENVAT Credit:
TTP availed CENVAT credit of Rs. 8,88,075/- on the strength of 78 invoices issued by OPPL. The department raised issues regarding the pre-authentication of invoices and the quantity of SK exceeding the imported quantity as per Bills of Entry. The Tribunal found that the invoices were duly pre-authenticated by the proper officer, meeting the requirements of Notification No. 33/2000(N.T.) dated 7-4-2000. Regarding the excess quantity issue, the Tribunal noted that all SK supplied by OPPL to TTP was duty paid, and thus, the demand for CENVAT credit was not justified. Consequently, the appeal by TTP was allowed.

4. Validity of Invoices for CENVAT Credit:
The department contended that the 78 invoices were not valid for CENVAT credit as they were not properly pre-authenticated. The Tribunal examined the registers and confirmed that the invoices were pre-authenticated by the Superintendent of Central Excise, fulfilling the notification requirements. Thus, the invoices were deemed valid documents for availing CENVAT credit.

In conclusion, the Tribunal set aside the demand of Rs. 5,01,378/- against OPPL but upheld the penalty for improper maintenance of the RG 23D Register. For TTP, the Tribunal allowed the appeal, confirming that the CENVAT credit availed was regular and legal, based on the valid pre-authenticated invoices and the duty-paid status of the SK supplied.