2008 (12) TMI 550 - AT - Central Excise

Summary

Issues:
Denial of Cenvat credit availed by the assessee, irregular credit taken by the assessee, entitlement of the assessee for the credit of duty deposited, technical lapse in issuing invoices, appeal by Revenue dismissed.

Analysis:

1. Denial of Cenvat Credit:
The appeal was filed against the denial of Cenvat credit amounting to Rs. 1,99,09,514/- by the assessee. The issue arose when the assessee, having a factory in New Delhi, cleared 'Semi-finished Ayurvedic Medicines' to their sister unit in Bangalore without paying duty. Subsequently, the Delhi factory was asked to pay duty by Excise officials, leading to the deposit of the amounts. The assessee then took Cenvat credit at the Bangalore factory. The Tribunal had earlier ruled in favor of the assessee, and the Department did not appeal against this decision. Despite this, the Central Excise authorities in Bangalore proceeded against the assessee, claiming irregular credit.

2. Irregular Credit Taken:
The Revenue contended that the credit taken by the assessee was irregular as it was not based on invoices issued at the time of goods clearance. The Revenue argued that the documents for credit were generated at a later date, making them inadmissible under the Cenvat Credit Rules and the Central Excise Act. However, the receipt of goods and payments made by the assessee were not in doubt. The assessee had pursued remedies before the Delhi Central Excise authorities, and the matter was pending before the Delhi Commissioner (Appeals).

3. Entitlement for Duty Deposited Credit:
The Tribunal found that the assessee was entitled to the credit of duty deposited, as the goods were received at Bangalore without dispute, and the duty deposit was not contested. Despite technical lapses in issuing invoices, the Tribunal considered it a mere technical breach due to the assessee's belief that the goods were not excisable. The Tribunal allowed the appeal, granting consequential relief to the party but clarified that no relief would be provided at Delhi. The order was to be communicated to the jurisdictional authorities in Delhi.

4. Revenue's Appeal Dismissed:
The Revenue's appeal was dismissed since the party's appeal had been allowed, indicating no merit in the Revenue's grounds for appeal. The Tribunal pronounced the decision in open court, concluding the judgment.