2015 (4) TMI 1025 - AT - Central Excise

Denial of CENVAT CREDIT - Credit merely on the strength of the duty-paying documents i.e. Bill of Entry without using the scrap as inputs in the manufacture of final products - Held that - Appellant indeed submitted a letter dated 23/08/2010 wherein they have requested the adjudicating authority to provide relied upon documents as listed in Annexure III to the show cause notice. However, the adjudicating authority has not dealt this request and even not stated anything in the order whether the relied upon documents were supplied along with the show cause notice. It is also observed that the request of the appellant made by appellant s letter dated 23/08/2010 for supply of relied upon documents was also recorded by the learned Commissioner (Appeals) in his order in para 14. However, no finding was given. In view of the above factual matrix, the appellant s submission that they were not supplied the relied upon documents and, therefore, they could not made their defence submission effectively found to be reasonable. - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
Appeal against confirmation of demand upon denial of CENVAT credit, interest, and penalties; redemption fine set aside.

Analysis:
The appeal was directed against an order where the confirmation of demand upon denial of CENVAT credit, interest, and penalties was upheld, but a redemption fine was set aside. The case involved the purchase of imported aluminum scrap on high-sea-sale basis, diversion of the imported scrap to a different location without using it as inputs in the manufacturing process, and availing CENVAT credit based solely on duty-paying documents. A show cause notice was issued demanding CENVAT credit repayment, interest, and proposing confiscation of inputs. The original order adjudicated the matter, leading to the recovery of CENVAT credit, imposition of penalties, and fines in lieu of confiscation.

The appellant appealed the original order, but it was dismissed due to non-compliance with a pre-deposit order. The matter was remanded to the Commissioner (Appeals) by the Tribunal for a fresh decision on merits. In the subsequent order, recovery of CENVAT credit was partially upheld, interest demand confirmed, and penalties reduced. Redemption fines were set aside. The appellants then approached the Tribunal again.

During the proceedings, the appellant argued that they were not supplied with relied-upon documents, affecting their ability to present a defense effectively. The appellant's request for these documents was not adequately addressed by the adjudicating authority, leading to a violation of natural justice principles. The Revenue, however, contended that the appellant had opportunities for personal hearings but did not avail them.

The Tribunal found merit in the appellant's argument regarding the lack of supplied documents impacting their defense. Consequently, the matter was remanded to the original adjudicating authority with a directive to provide all relied-upon documents, offer sufficient personal hearing opportunities, and issue a fresh order within three months. All issues were kept open for further consideration.

In conclusion, the appeals were disposed of by remanding the matter to the original adjudicating authority for a reevaluation considering the lack of supplied documents and the need for a fair opportunity for the appellant to present their case effectively.