2010 (10) TMI 992 - AT - Central Excise

Summary

Issues involved: Availment of credit on the basis of Nominal Issue Voucher, applicability of Rule 16 for availing credit, limitation period for Show Cause Notice issuance.

Summary:

Availment of credit on the basis of Nominal Issue Voucher:
The appellant, engaged in the manufacture of rough forging, cleared goods to an ordnance factory under Central Excise invoices. When the goods were returned by the factory with Nominal Issue Vouchers, the appellant entered them in their records and availed credit. The Revenue objected, stating that credit based on such vouchers was not valid. The lower authorities rejected the appellant's explanation, leading to the present appeal.

Applicability of Rule 16 for availing credit:
The appellant's advocate cited precedents where Rule 16 allowed credit for duty paid on rejected goods without strict adherence to Rule 7 on document requirements. The Tribunal found that the legislative intent behind Rule 16 supported the appellant's claim for credit based on Central Excise invoices, even if vouchers were also used. The technical objection by the Revenue was dismissed in light of the legislative intent.

Limitation period for Show Cause Notice issuance:
The Tribunal noted that the Show Cause Notice issued in 2007 for credit availed between 2004 and 2006 was beyond the limitation period. The appellant had duly recorded the returned goods and availed credit in their records, which were part of a return filed in 2004. As the notice was based on a scrutiny revealing alleged irregularities in the 2004 return, no intent to evade duty payment was established. Therefore, the Tribunal held the notice as barred by limitation.

In conclusion, the Tribunal set aside the previous order, allowing the appeal with consequential relief.