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2010 (7) TMI 577 - AT - CustomsDocuments for availing cenvat credit - Denial of credit was that the assessees produced only photocopies of the original invoices on the strength of which credit was taken but did not produce original of the transporters - Find that receipt of the goods in the assessee s factory and the use thereof stand confirmed by the report of the officer - The assessee s stand that the non-production of the original was due to its loss does not stand controverted - The photocopy of the original invoice shows that the goods have discharged duty - The cumulative circumstances led to the conclusion that credit is to be extended to the assessees as their claim namely inputs being duty paid, and the use thereof in the factory of the assessees stands established - Failure on the part of the department due to long time gap to verify the transporters copy in original cannot lead to denial of substantive benefit of credit to the assessees - Held that, the impugned order and reject the appeal.
Issues:
1. Disallowance of MODVAT credit and penal action due to non-production of original transporters' copy of invoices. 2. Verification issues regarding duty paid nature of goods for refund claim. 3. Dispute over the entitlement of MODVAT credit due to lack of original documents. Issue 1: Disallowance of MODVAT credit and penal action due to non-production of original transporters' copy of invoices: The Asst. Commissioner disallowed MODVAT credit of Rs. 1,62,225 and took penal action against the assessees for not producing the original transporters' copy of invoices. The Commissioner (Appeals) found that the duty paid nature of the goods and receipt of the goods in the factory were not disputed. The lower appellate authority set aside the denial of credit but directed verification of duty paid nature before allowing re-credit or refund. The Asst. Commissioner's attempt to verify duty paid nature failed due to unavailability of invoices from 1995. The Commissioner (Appeals) overturned the rejection of the refund claim, stating that substantial compliance for MODVAT credit was made by the assessees, and non-availability of original documents should not debar them from availing credit. Issue 2: Verification issues regarding duty paid nature of goods for refund claim: The Asst. Commissioner's inability to verify the duty paid nature of goods due to a time gap led to the rejection of the refund claim. However, the Commissioner (Appeals) held that when verification was not feasible, and the department was satisfied about the receipt and use of goods, the assessees should not be denied the benefit of MODVAT credit. The appellate judge upheld this decision, emphasizing that the receipt and use of goods were confirmed, and the loss of original documents did not negate the duty paid status as evidenced by the photocopies. Issue 3: Dispute over the entitlement of MODVAT credit due to lack of original documents: The judge noted that the goods' receipt and use in the factory were confirmed, and the photocopies of original invoices indicated duty discharge. Despite the department's failure to verify the original transporters' copy due to a long time gap, the judge upheld the decision to extend credit to the assessees. The judge emphasized that the failure to verify the original documents should not result in the denial of credit when the duty paid nature of the goods and their utilization in the factory were established. This detailed analysis of the judgment highlights the issues related to the disallowance of MODVAT credit, verification challenges for refund claims, and the dispute over entitlement based on document authenticity.
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