2009 (6) TMI 765 - AT - Central Excise

Summary

Issues:
- Availment of Cenvat Credit on Additional Excise Duty (GSI) without proper duty paying documents.
- Disallowance of credit and imposition of penalty under Section 11AC of the Central Excise Act.
- Interpretation of Rule 9 of the Cenvat Credit Rules, 2004 regarding eligibility for credit based on documents.

Analysis:
1. The appellants, engaged in the manufacture of Aerated Water and Beverage Syrup, availed Cenvat Credit on Basic Excise Duty during a specific period based on invoices issued by a Registered Dealer. The issue arose when the appellants also claimed credit on Additional Excise Duty (GSI) without proper supporting documents, leading to the disallowance of credit and imposition of a penalty under Section 11AC by the Original Authority, a decision upheld by the Commissioner (Appeals).

2. The appellant's representative argued that during the relevant period, there was no provision to avail credit on Additional Excise Duty (GSI), and the dealer's invoices did not mention the AED (GSI) despite payment being made. The representative contended that the credit was based on manufacturer's invoices linked with dealer's invoices, challenging the Commissioner's finding of improper documentation for the credit.

3. The Revenue's representative supported the Commissioner's decision, emphasizing the appellant's failure to provide evidence supporting the credit in the RG-23A Part-II Register and the absence of AED (GSI) mention in the dealer's invoices. Referring to Rule 9 of the Cenvat Credit Rules, 2004, it was argued that proper documents are necessary for credit availing, which the appellants failed to produce in this case.

4. The Tribunal noted that the eligibility of credit on AED (GSI) was not disputed, but the dispute centered on the lack of proper duty paying documents as required by Rule 9. The appellants availed credit based on dealer's invoices, which did not show payment of AED (GSI). Despite arguments regarding higher values in dealer's invoices indicating AED (GSI) payment, the Tribunal held that credit eligibility relies on duty paying documents per Rule 9, which in this case were the dealer's invoices lacking AED (GSI) details.

5. Ultimately, the Tribunal upheld the demand for duty and interest due to the absence of proper duty paying documents supporting the AED (GSI) credit. However, the penalty under Section 11AC was set aside as there was no intent to evade duty payment. The decision highlighted the importance of complying with Rule 9 for availing credits based on valid duty paying documents, emphasizing the significance of accurate documentation in claiming Cenvat Credit.