2009 (4) TMI 771 - AT - Central Excise

Summary

Issues Involved:
The issues involved in the judgment are related to the disallowance of Cenvat credit on the basis of invoices issued by registered dealers, the imposition of penalties on manufacturers and dealers, and the validity of credit availed by manufacturers of final products.

Disallowed Cenvat Credit and Penalties:
The case involved appeals against the disallowance of Cenvat credit and imposition of penalties on registered dealers and manufacturers. The original authority disallowed credit availed by manufacturers of final products based on invoices issued by registered dealers, alleging that the manufacturer of input did not have machinery to produce goods during a specific period. The Commissioner (Appeals) set aside the penalties imposed on the respondents, leading the Revenue to file further appeals.

Contentions of the Revenue and Respondents:
The Revenue contended that the invoices were issued without actual supply of scrap, leading to the disallowance of credit and penalties. On the other hand, the respondents argued that similar cases involving different manufacturers had penalties set aside by the Commissioner (Appeals) and the Tribunal. They highlighted that the Tribunal had previously upheld the validity of credit availed by manufacturers in similar circumstances.

Judicial Findings and Decision:
Upon review, the Tribunal found that the manufacturers of final products had availed credit based on valid invoices issued by registered dealers. The original authority's disallowance of credit utilized by the manufacturer of inputs was deemed unsubstantiated. The Tribunal referenced a previous case where a similar issue was resolved in favor of the respondents, emphasizing the entitlement of credit based on valid documents. Consequently, the Tribunal upheld the decision of the Commissioner (Appeals) to set aside the penalties on registered dealers and manufacturers of final products, rejecting all appeals filed by the Revenue.