2006 (2) TMI 449 - AT - Central Excise

Summary

Issues:
Denial of Modvat credit for returned door trims.

Analysis:
The appellant, a manufacturer of automobile parts, specifically "door trims," supplied these to various automobile manufacturers. Some of the supplied items were returned as rejects, leading to the denial of Modvat credit amounting to Rs. 1,16,587. The denial was based on the statement of the Company's Finance Manager, indicating that the rejected materials were destroyed due to being non-usable or non-repairable. The appellant, represented by counsel, argued that the denial was unfounded as they had been receiving the rejected goods, repairing them, and incorporating them back into production, as evidenced by Rule 57A account copies presented.

The counsel contended that the denial was solely based on the Finance Manager's statement, which contradicted the documentary evidence showing the repair and clearance of the damaged door trims. It was emphasized that an uncorroborated statement should not override contemporaneous documentary evidence. Consequently, the Tribunal found the denial of credit unsustainable, as the documentary evidence supported the repair and clearance process. The impugned order was set aside, and the appeal was allowed in favor of the appellant, granting consequential relief.

In conclusion, the judgment highlighted the importance of relying on concrete documentary evidence over individual statements, especially when such statements are contradicted by contemporaneous records. The decision ultimately favored the appellant, emphasizing the significance of substantiated evidence in legal proceedings.