2005 (4) TMI 427 - AT - Central Excise

Summary

Issues involved:
1. Denial of Modvat credit on the original copy of the invoice.
2. Denial of Modvat credit on C.I. Scrap as capital goods.
3. Imposition of penalty of Rs. 30,000.

Analysis:
1. The appellants contested the denial of Modvat credit amounting to Rs. 41,592 on the original copy of the invoice. The Tribunal highlighted that Modvat credit can only be claimed on the duplicate copy meant for the transporter. The appellants failed to prove the loss of the duplicate copy either in transit or in their office. Although they informed the Asstt. Commissioner about the misplacement of the duplicate copy, they did not provide conclusive evidence of its loss. As a result, the Tribunal upheld the denial of Modvat credit on the original invoice.

2. The denial of Modvat credit amounting to Rs. 3061 on C.I. Scrap as capital goods was also challenged by the appellants. The Tribunal ruled that these goods could not be considered as capital goods. The appellants' argument that the goods were mistakenly booked under 'capital goods' instead of 'inputs' was not accepted. Once the credit was claimed as capital goods, it could not be changed to claim credit as inputs. The Tribunal emphasized the distinct procedures for claiming credit on capital goods and inputs, thereby affirming the correctness of the denial of credit on C.I. Scrap. The imposition of a penalty of Rs. 30,000 for wrongly availing Modvat credit was deemed appropriate by the Tribunal.

3. Consequently, the Tribunal upheld the impugned order, dismissing the appeal of the appellants. The decision was made after considering the failure of the appellants to provide sufficient evidence for the loss of the duplicate copy of the invoice and the incorrect classification of C.I. Scrap as capital goods. The penalty imposed was maintained, as the appellants were found to have wrongly availed Modvat credit.