2005 (8) TMI 612 - AT - Central Excise

Summary

Issues: Disallowance of credit based on TR-6 challan as a duty paying document.

In this case, the appellant, a manufacturer of denatured ethyl alcohol and fuel oil, cleared molasses under bond executed by merchant exporters, who later diverted the consignment for home consumption by paying Central Excise duty. The appellant purchased the duty-paid molasses and took credit based on the TR-6 challan. The original adjudicating authority disallowed the credit, citing that TR-6 challan is not a specified duty paying document. The Commissioner (Appeals) ruled in favor of the appellant, emphasizing that the TR-6 challan is a valid instrument for payment of dues to the government, even though it may not specify the particulars of goods. The Commissioner relied on precedent and set aside the original order, allowing the appeal. The revenue appealed this decision, arguing that TR-6 challan is not a specified document for availing Modvat credit. However, the appellate authority upheld the Commissioner's decision, stating that the peculiar facts of the case justified taking credit based on the TR-6 challan. The revenue's appeal was rejected, affirming the allowance of credit based on the TR-6 challan.

This judgment revolves around the issue of whether TR-6 challan can be considered a valid duty paying document for the purpose of availing credit. The Commissioner (Appeals) held that while TR-6 challan may not be specified under Rule 57-G of the Central Excise Rules, it serves as an instrument for payment of dues to the government and is prescribed under the Treasury Rules. The Commissioner noted that the TR-6 challan's lack of a column for indicating goods does not invalidate it, as the supplier mentions the goods' particulars against which duty is paid. Citing a precedent, the Commissioner emphasized that TR challan is a valid duty paying document. Therefore, the denial of Modvat credit based on the TR-6 challan was deemed unjustified, leading to the setting aside of the original order and the imposition of penalty. The Commissioner's analysis highlights the importance of substance over form in accepting TR-6 challans as valid instruments for duty payment and credit availing.

The appellate authority's decision to uphold the Commissioner's ruling further solidifies the acceptance of TR-6 challan as a valid document for availing credit in specific circumstances. Despite the revenue's contention that TR-6 challan is not a specified document for Modvat credit, the appellate authority found no justifiable reason to deviate from the Commissioner's decision. The authority recognized the peculiar facts of the case, where duty payment on molasses was undisputed, justifying the appellant's credit based on the TR-6 challan. By rejecting the revenue's appeal, the appellate authority reaffirmed the importance of considering the practical implications and specific context of each case in determining the validity of duty paying documents for credit availing purposes. The judgment underscores the need for a pragmatic approach in interpreting and applying regulatory provisions to ensure fairness and efficiency in excise duty matters.