2007 (3) TMI 459 - AT - Central Excise

Summary

Issues involved: Appeal against disallowance of Modvat/Cenvat credit, alleged wrongful issuance of invoices, suppression of material facts, correctness of Modvat/Cenvat credit taken.

Issue 1: Disallowance of Modvat/Cenvat credit

The Revenue appealed against the order disallowing Modvat/Cenvat credit of Rs. 5536.00, imposing penalties and ordering recovery of interest. The adjudicating authority held that the assessee had not received goods against certain invoices, leading to the illegal availing of Modvat credit. However, the appellate Commissioner found evidence that the goods were indeed received by the assessee as per the invoices issued by M/s. HWP Ltd., and that the credit was correctly taken. It was concluded that no irregularity was committed by the assessee and all records were maintained properly, resulting in the appeal being allowed in favor of the assessee.

Issue 2: Alleged wrongful issuance of invoices

The Revenue alleged that the assessee wrongly availed Modvat/Cenvat credit due to the wrongful issuance of invoices by M/s. HWP Ltd. without supplying the goods. The adjudicating authority relied on the admission of the assessee's authorized signatory to support this claim. However, the assessee provided evidence, including copies of invoices, statements of account, court cases, demand drafts, and RG 23 Part-II register entries, demonstrating that the goods were indeed supplied against the invoices in question. The appellate Commissioner upheld that the goods were received by the assessee as per the invoices issued by M/s. HWP Ltd., and the credit was rightfully taken. The appeal was deemed frivolous, and costs of Rs. 5,000 were awarded to the respondent.