2008 (8) TMI 738 - AT - Central Excise

Summary

Issues:
Demand of duty based on denial of Modvat credit for furnace oil due to a consolidated entry.

Analysis:
The case involves the confirmation of duty demand against the appellant for Rs. 1,74,155 by denying Modvat credit for 384 KLS of furnace oil. The dispute centers around the denial of benefit due to a consolidated entry instead of individual entries for issuance of the oil. The show cause notice alleged the impermissibility of such consolidated entries under Modvat Rules, leading to the rejection of the credit. The matter had been previously remanded to the assessee to provide evidence of actual use of the oil in manufacturing the final product. In response, the appellants submitted a Chartered Accountant's certificate, which was rejected by the Commissioner (Appeals) for lack of supporting records.

The Tribunal noted that there was no allegation of the cleared oil not being used by the appellant, and the excess consumption claim supported by the Chartered Accountant's certificate remained unchallenged by the Revenue. The show cause notice did not assert non-use or clearance of the oil but focused on the consolidation entry issue. The Tribunal found the denial of credit unjustified given the circumstances and lack of evidence showing non-use or clearance of the oil from the factory. Consequently, the Tribunal set aside the impugned order and allowed the appeal, providing consequential relief to the appellant.

In conclusion, the Tribunal's decision revolved around the lack of evidence supporting the Revenue's denial of Modvat credit based on a consolidated entry for furnace oil. The Tribunal emphasized the absence of proof indicating non-use or clearance of the oil, ultimately leading to the allowance of the appeal and the rejection of the duty demand.