2010 (12) TMI 1125 - AT - Central Excise

CENVAT credit - intermediate goods - Steel Wire ropes - Tubes/sheets - Non ST Billets/Blooms/Steel forgings/MS Rounds & Flats/Billets - denial on the ground that the goods are not inputs as declared - duty paying invoices

Summary

Issues Involved:
1. Entitlement to Cenvat credit on various items received by the appellant.
2. Denial of credit taken on extra copy/buyer's copy of invoices.
3. Imposition of penalty on the appellant.

Detailed Analysis:

Entitlement to Cenvat Credit:
The appellant, M/s. SAIL (Bhilai Steel Plant), challenged the denial of Cenvat credit on several items. The Commissioner (Appeals) had allowed credit for chain assembly, unmachined castings, copper coated wire, and grate bar but denied credit for other items. The appellant claimed these items were used in manufacturing capital goods or intermediate goods within their workshops.

For items such as steel wire ropes, tubes, sheets, non-ST billets, blooms, steel forgings, MS rounds, and flats, the Commissioner found that these were not inputs under Rule 57A nor capital goods under Rule 57Q during the relevant period. The appellant failed to provide specific details of the machinery for which these items were used, rendering their claim ambiguous. The Tribunal noted that the appellant is entitled to seek Cenvat credit under the relevant provisions even if initially claimed under incorrect provisions. The Tribunal directed the lower authorities to re-examine if the items qualify as capital goods eligible for Cenvat credit.

Denial of Credit on Extra Copy/Buyer's Copy of Invoices:
The Commissioner (Appeals) upheld the denial of Cenvat credit amounting to Rs. 14,20,379/- taken on extra copy/buyer's copy of invoices, citing that Rule 57G prescribed the 'duplicate copy of invoice' as the proper document for availing credit. The Tribunal noted that the relevant notification and CBEC Circular cited by the appellant were issued after the material period and thus were not applicable. The Tribunal referenced the Larger Bench decision in CCE v. Avis Electronics Pvt. Ltd., which required adherence to prescribed rules for claiming credit. The Tribunal remanded this issue to the original authority for the appellant to establish its entitlement.

Imposition of Penalty:
The Commissioner reduced the penalty from Rs. 3,00,000/- to Rs. 2,00,000/-. The appellant contested the penalty, arguing that the issue involved interpretation of rules. The Tribunal did not provide a specific ruling on the penalty but implied that the matter should be reconsidered in light of the remand.

Conclusion:
The Tribunal allowed the appeal by way of remand, directing the lower authorities to re-examine the entitlement to Cenvat credit on the disputed items and the denial of credit taken on extra copy/buyer's copy of invoices. The Tribunal emphasized the need for the appellant to provide specific evidence regarding the use of the items in question. The appeal was thus allowed for a fresh decision after hearing the appellant.