2011 (10) TMI 99 - AT - Central Excise

Denial of Cenvat credit - disallowance of Cenvat credit was that of non-production of original invoice - Without making any independent examination of the whole chain of transactions the appellant was denied Cenvat credit - Held that dispute being on a very limited point Both sides agree to dispose off appeal and stay - all the relevant documents should be verified by the department from the record of BSNL and also test averments of the Appellant - if the capital goods has arrived and was installed and no duplicate claim was made on the self same capital goods, the appellant should not be denied Cenvat credit - Appeal allowed by remand

Summary

Issues: Denial of Cenvat credit based on the use of zerox copies of documents.

In this judgment by the Appellate Tribunal CESTAT, New Delhi, the issue at hand was the denial of Cenvat credit to the appellant due to the use of zerox copies of documents instead of original invoices. The appellant argued that the goods in question were received, and capital goods Cenvat credit was rightfully availed. The counsel highlighted that there was no dispute about the receipt and use of the capital goods, and the denial was solely based on the non-production of original invoices. The Tribunal noted that there was no independent inquiry conducted by the authority to deny the credit and emphasized that Cenvat credit should not be denied when the receipt of goods and installation is not in doubt, citing a past judgment regarding a similar case involving B.S.N.L., a public sector entity. The Tribunal ruled in favor of the appellant, allowing the appeal and stay application, but remanded the matter back to the Adjudicating Authority to verify relevant documents and ensure no duplicacy of claims in the future.

The counsel for the appellant argued that the denial of Cenvat credit was unjustified as the goods were received, and capital goods credit was availed. On the other hand, the Departmental Representative contended that the authorities had examined the issue and disallowed the credit based on the use of zerox copies of documents. The Tribunal observed that the dispute was narrow, and there was no independent inquiry conducted by the authority to deny the credit. It was noted that the reasoning behind the disallowance was the non-production of original invoices, and the Tribunal referred to a previous judgment involving B.S.N.L. to support the appellant's entitlement to the credit. The Tribunal directed the Adjudicating Authority to verify all relevant documents and ensure no duplicacy of claims in the future before granting the Cenvat credit to the appellant.

In conclusion, the Appellate Tribunal CESTAT, New Delhi, ruled in favor of the appellant, allowing the appeal and stay application. The Tribunal emphasized the importance of verifying relevant documents and avoiding duplicacy of claims in the future before granting Cenvat credit. The matter was remanded back to the Adjudicating Authority for further examination and verification to ensure the appellant's entitlement to the credit.