2007 (6) TMI 430 - AT - Central Excise

Summary

Issues:
1. Availment of Modvat/Cenvat credit on stock of inputs.
2. Verification of duty paid character of goods.
3. Failure to consider evidence by lower authorities.

Issue 1: Availment of Modvat/Cenvat credit on stock of inputs:
The appellant availed Modvat/Cenvat credit on the stock of inputs lying in the factory on the date of registration with the Central Excise department. The lower authorities confirmed the demand and imposed penalties, alleging the appellant did not provide sufficient evidence regarding the duty paid character of the goods and the quantity of stock. The appellant argued that they had submitted declarations and documents to prove the duty paid nature and quantity of the stock, which the lower authorities allegedly did not consider.

Issue 2: Verification of duty paid character of goods:
The main issue revolved around whether the appellant was eligible to avail Modvat credit on the stock of inputs. The appellant had filed a declaration with the authorities indicating the quantity of stock available with them. The revenue did not physically verify the stock after receiving the declaration. The appellant also provided Xerox copies of invoices to prove the duty paid character of the inputs. The judge found that the lower authorities failed to consider the evidence available on record and concluded that the appellant had not satisfied the duty paid character requirement. The judge emphasized that the stock quantity declared by the appellant, which was not verified by the officers, should be considered as lying in stock.

Issue 3: Failure to consider evidence by lower authorities:
The judge noted that the lower authorities did not adequately consider the documentary evidence provided by the appellant to establish the duty paid nature of the inputs. The appellant had submitted original copies of the invoices to support their claim, which the lower authorities seemingly overlooked. The judge concluded that the lower authorities' decision that the appellant failed to produce sufficient documentary evidence was contrary to the evidence available on record. As a result, the judge remitted the issue back to the adjudicating authority to verify the duty paid character of the inputs and make a fresh determination.

In conclusion, the appellate tribunal set aside the order denying Modvat credit to the appellant and remitted the matter back to the adjudicating authority for further verification. The judge clarified that the stock quantity declared by the appellant had attained finality and did not need further examination. The appeal was allowed with consequential relief, if applicable.