2009 (5) TMI 858 - AT - Central Excise

Summary

Issues:
- Disallowance of Cenvat credit on tyres based on invoices not in the name of recipient.
- Imposition of penalty for the interpretation of legal provisions.

Analysis:
1. Cenvat Credit Disallowance:
The appeal concerned the disallowance of Cenvat credit amounting to Rs. 66,193/- on tyres based on invoices not issued in the name of the recipient. The original authority had disallowed the credit, leading to the recovery of the same amount as duty, interest, and imposition of a penalty. The Commissioner (Appeals) upheld this decision. The appellant argued that despite the Tribunal disallowing credit in similar situations previously, the receipt of tyres in their factory was not disputed. However, the Tribunal found that the invoices were not in the name of the appellant nor endorsed in their favor, raising questions on the transfer of tyres from the depot to the appellant. Consequently, the denial of credit and the demand for duty with interest were deemed justified.

2. Penalty Imposition:
The matter also involved the imposition of a penalty for the interpretation of legal provisions. The Tribunal concurred with the Commissioner (Appeals) that Cenvat credit could not be allowed based on invoices not appropriately endorsed or addressed to the recipient. Despite upholding the demand for duty and interest, the Tribunal decided that in the circumstances of the case, where the issue primarily revolved around the interpretation of legal provisions, the imposition of a penalty was deemed unwarranted. Therefore, the penalty was set aside while upholding the duty demand along with interest. The appeal was disposed of in this manner.