2008 (1) TMI 785 - AT - Central Excise

Cenvat/Modvat - Documents for availing credit - Held that - the appellant made payment regarding the goods directly to the TISCO and thereafter inputs were released by their consignment agent. There is no evidence on record to show that TISCO is also connived with the appellant by issuing duty paying documents only - appeal allowed.

Summary

Issues:
1. Denial of Modvat credit to the appellant.
2. Imposition of penalties on the Director of M/s. Vimal Alloys and consignment agent M/s. Adhunik Ferro Alloys.
3. Allegation by Revenue regarding duty paying documents and receipt of inputs by M/s. Vimal Alloys.
4. Contention of the appellant regarding procurement of goods from TISCO and usage in manufacturing.
5. Allegation by Revenue regarding transportation of goods to customers based on vehicle number in invoices.
6. Comparison with the case of Viraj Alloys Ltd. & Ors. v. CCE and A.K. Pvt. Ltd. v. CCE.

Analysis:

1. The appellant filed appeals against an order denying Modvat credit and imposing penalties. The Revenue alleged that M/s. Vimal Alloys did not receive inputs as the invoices had vehicle numbers not of goods transport vehicles. The adjudicating authority upheld the demand and penalties. However, the appellant argued that goods were supplied by TISCO to their consignment agent, and payments were made in advance through banking channels. The appellant contended that the goods received were used in manufacturing cleared goods, and no procurement from other sources occurred, making the demand unsustainable.

2. The Revenue contended that the vehicle numbers in consignment agent invoices did not belong to goods carriers, implying goods were not transported to customers. The Revenue cited a previous Tribunal decision to support their stance. However, the appellant demonstrated that goods were supplied by TISCO and released by the consignment agent after advance payments. Unlike the case cited by the Revenue, the appellant had evidence of direct payments to TISCO for the goods in question. Referring to a previous Tribunal decision in A.K. Pvt. Ltd. v. CCE, the impugned order was set aside, and the appeals were allowed based on the direct payment evidence and the lack of connivance between TISCO and the appellant in issuing duty paying documents.

3. In conclusion, the Tribunal found in favor of the appellant, setting aside the denial of Modvat credit and penalties. The judgment emphasized the direct payments made to TISCO for the goods and distinguished the case from previous decisions where evidence of receipt of inputs was lacking. The appellant's procurement process and usage of goods in manufacturing were deemed compliant, leading to the reversal of the impugned order.