2005 (1) TMI 559 - AT - Central Excise

Summary

Issues:
1. Allegation of fraudulent availing of irregular Modvat credit.
2. Discrepancy in the name of the supplier mentioned in the show-cause notice and the actual supplier.
3. Lack of investigation and report regarding the supplier.
4. Supplier not having a godown as per Department's subsequent enquiry.
5. Appellants receiving inputs duty paid with proper invoices and making payment by Account Payee Cheque.
6. Denial of credit and justification for setting aside the impugned order.

Analysis:
1. The appellant claimed to have purchased inputs from a registered supplier, complying with all procedures for manufacturing dutiable goods. The appellant argued that the allegation of fraudulently availing irregular Modvat credit was baseless, citing a relevant legal precedent. The Tribunal acknowledged the appellant's prima facie case and waived the pre-deposit condition, allowing the appeal to be heard.

2. The discrepancy arose regarding the supplier's name mentioned in the show-cause notice and the actual supplier from whom the appellants purchased the inputs. The Tribunal noted that the investigation lacked evidence or reports regarding the supplier, leading to a flawed notice. Despite the Department's subsequent enquiry revealing that the supplier did not have a godown, the Tribunal deemed this discrepancy non-fatal for the appellant.

3. Emphasizing that the appellants received inputs duty paid with proper invoices from the supplier, and made payments through legitimate means, the Tribunal found no justifiable reason for denying the credit. The Tribunal highlighted that the supplier held Central Excise Registration and issued valid invoices, aligning with the appellant's compliance with procedural requirements for availing credit.

4. Considering the circumstances and precedents cited, such as the case of M/s. Bhuwalka Steel Industries Ltd., the Tribunal set aside the impugned order and allowed the appeal in favor of the appellants. The Tribunal also disposed of the stay petition, providing consequential relief to the appellants based on the valid procurement and usage of inputs in the manufacturing process.

This comprehensive analysis of the judgment addresses the key issues raised in the legal dispute and outlines the Tribunal's reasoning and decision-making process in resolving the matter.