2008 (7) TMI 722 - AT - Central Excise

Cenvat/Modvat - Documents for availing credit - Penalty - Held that - the special nature of the goods obtained through courier imports and also considering the fact that the photocopy of the computer generated bill of entry is attested by the customs appraising official, it is felt that the Appellants as a special case should be allowed duty credit subject to proof of utilization of the impugned goods as well as the fact of direct import by the Appellants to the satisfaction of the jurisdictional officers - matter is remanded to the original Authority, before whom the Appellants shall produce necessary proof regarding duty payment and utilization of the impugned goods, who shall after proper verification allow them the credit. As regards the penalty, in view of the fact that the Appellants have taken the credit initially without applying to the proper officer for availing credit in respect of the impugned attested photocopy of the bill of entry, I am of the view that some penalty is justified. Appeal allowed in part and part matter on remand.

Summary

Issues: Denial of CENVAT credit for imported goods due to submission of photocopy instead of triplicate copy of bill of entry; Applicability of duty credit for goods obtained through courier imports; Penalty imposition for failure to apply for credit properly.

In this case, the Appellants were denied CENVAT credit for imported goods as they submitted a photocopy instead of the required triplicate copy of the bill of entry. The Appellants imported parts of Forklift Trucks through courier import by air due to urgency, and the submitted copy was a computer-generated bill of entry attested by the customs appraising officer. The Appellants did not apply to the proper officer for credit on the photocopy, but stated that the parts were utilized in their factory, offering to provide proof for verification. The Tribunal acknowledged the special circumstances of courier imports and the attestation by the customs official, allowing duty credit upon proof of utilization and direct import satisfaction of jurisdictional officers. The original order denying duty credit was set aside, and the matter was remanded for verification and allowance of credit, with a penalty of Rs. 5,000 imposed for failure to apply for credit properly.

The Tribunal considered the unique situation of goods obtained through courier imports and the attestation on the computer-generated bill of entry by the customs appraising officer. Despite acknowledging the lapse on the part of the Appellant-company for not applying for credit properly, the Tribunal allowed duty credit subject to proof of utilization and direct import satisfaction. The Appellants were directed to produce necessary proof to the original Authority for verification, who would then allow the credit after proper scrutiny. Additionally, a penalty of Rs. 5,000 was imposed, reducing the original penalty amount, considering the initial failure to apply for credit properly.

The judgment partially allowed the appeal, setting aside the original order denying duty credit and remanding the matter for verification and allowance of credit based on proof of utilization and direct import satisfaction. The penalty imposed for failure to apply for credit properly was reduced to Rs. 5,000. The decision highlighted the special circumstances of courier imports and the importance of proper documentation and application for duty credit to avoid penalties.