2008 (8) TMI 941 - AT - Central Excise

Summary

Issues: Alleged irregular availing of Cenvat credit under Rule 12 of Cenvat Credit Rules, 2002; Penalty leviable for non-verification of details; Verification of documents produced by the appellant.

In this case, the appellants were alleged to have irregularly availed Cenvat credit amounting to Rs. 2,12,849 under Rule 12 of Cenvat Credit Rules, 2002. The Department observed that the appellants had availed excess credit based on dealer invoices for 'Food Grade Hexane' from various suppliers. It was noted that invoices from one supplier were deemed improper for credit availing. The appellants contended that they provided all necessary documents but were not properly verified by the concerned officers, arguing against the denial of credit.

The appellant's counsel argued that since duty and interest were paid before the show cause notice, penalty imposition was unjustified. He emphasized that all required details were present in the documents, including manufacturer details and duty payment specifics, and any errors by suppliers should not be attributed to the appellants. The counsel sought the penalty's cancellation due to the lack of irregularities on the appellants' part.

On careful consideration, the Tribunal found that the appellants had indeed submitted all relevant invoices displaying essential product details. These invoices, issued by reputable suppliers, contained comprehensive information necessary for verification. The Tribunal concluded that the appellants did not act deliberately to warrant penalty imposition. Consequently, the penalty was set aside, and the case was remanded for re-adjudication to verify the documents thoroughly. The Original Authority was directed to conduct a fresh assessment within four months, ensuring adherence to natural justice principles. The appellants were permitted to retrieve the original documents for verification purposes, and the appeal was allowed for remand.

This judgment addresses the issue of alleged irregular Cenvat credit availing, penalty imposition for non-verification of details, and the necessity for thorough document verification in tax matters, emphasizing the importance of procedural fairness and compliance with legal requirements in tax assessments.