2009 (6) TMI 823 - AT - Central Excise

Summary

Issues:
Admissibility of Cenvat credit on returned goods without original invoices.

Analysis:
The original authority disallowed Cenvat credit of Rs. 1,67,833/- to the assessee and imposed a penalty under Section 11AC read with Rule 25 of the Central Excise Rules, 2002 and Rule 15 of the Cenvat Credit Rules, 2004. The Commissioner (Appeals) allowed the appeal of the assessee based on previous Tribunal judgments. The Cenvat credit in question was taken based on covering letters accompanying returned goods, not original invoices. The original authority denied credit citing Rule 9 of the Cenvat Credit Rules, 2004, while the appellate authority allowed credit as there was no dispute on the goods' receipt and duty payment. The Tribunal's decisions in other cases were considered as precedents for allowing the credit.

The Tribunal noted that the cases relied upon by the appellate authority were distinguishable as they involved goods returned with original invoices, unlike the present case where only letters accompanied the returned defective goods. The Tribunal emphasized that documents specified under Rule 9 must be followed for Cenvat credit. Failure to adhere to prescribed procedures disqualifies the claim for benefits. The Tribunal criticized the lower appellate authority for not discussing the cited precedents and not providing a reasoned decision. The Tribunal set aside the Commissioner (Appeals) order and allowed the appeal by the Revenue.

In conclusion, the Tribunal found that the assessee's claim for Cenvat credit on returned goods without original invoices, based solely on accompanying letters, was not in compliance with Rule 9 of the Cenvat Credit Rules, 2004. The Tribunal emphasized the importance of following prescribed procedures for claiming Cenvat credit and overturned the decision of the appellate authority, ruling in favor of the Revenue.