2008 (4) TMI 552 - AT - Central Excise

Summary

Issues involved: Appeal against penalty for irregular availment of Cenvat credit u/s Rule-9(1) of the Cenvat Credit Rules, 2004 based on xerox copies of bills of entry.

Issue 1: Duty payment and penalty imposition

The Appellate Tribunal noted that the duty amount had already been paid by the appellants, leaving only a penalty of Rs. 35,798 (equal to duty). Considering the short nature of the remaining issue and the deposit of duty, the appeal was taken up for final disposal without predeposit of the penalty amount.

Issue 2: Availment of Cenvat credit based on xerox copies of bills of entry

During Sept. '03 to Nov. '04, the appellants availed Cenvat credit of Additional Duty of Customs (CVD) using xerox copies of relevant bills of entry for imported goods. The department objected, issued a show-cause notice for credit recovery and penalty imposition. The original authority and first appellate authority upheld the penalty equal to duty. The appellants argued that the duty amount had been paid, and requested the penalty be vacated. It was found that the credit was denied due to a technicality - not using the prescribed document (triplicate copy of bill of entry) under Rule-9(1) of the Cenvat Credit Rules, 2004. Despite no mens rea attributed to the party, they were penalized for irregular Cenvat credit availment. The appellants abandoned their claim for credit, even though they were entitled to it, and the penalty was set aside by the Tribunal, allowing the appeal to that extent.