2011 (2) TMI 795 - AT - Central Excise

Duty paying documents - Availment of credit on the basis of photocopy of the bill of entry - Photocopy on which the credit has been taken is not certified copy and there is no evidence of loss of the original copy of the bill of entry - As the judgements of the Tribunal in the case of Vardhman Spg. & Gen. Mills Ltd. Vs. CCE 2001 -TMI - 50905 - CEGAT, NORTHERN BENCH, NEW DELHI held that modvat credit is not available on photocopy of the bill of entry when the same has been taken without certifying by the Asstt. Commissioner about loss of the original triplicate copy of the bill of entry. In this case, it is not disputed that the cevnat credit had been taken without the permission of the Asstt. Commissioner - Therefore, the Commissioner (Appeals) s order permitting the cenvat credit on the basis of the photocopy of the bill of entry is not correct and is liable to be set aside. Shortage of 10.370 M.T. of M.S. Ingots - find that the weighment had been determined in presence of the respondent s representative - For determining the weightment of the 10 ingots had been done and the average weight per ingot had been determined and thereafter the total weight had been determined by multiplying the total number of ingots with the average weight - While determining the weight in this manner, there will be only marginal difference between the weight recorded in the RG-I register and the weight determined but the difference cannot be to the tune of 10 M.T. - The respondent have not given any satisfactory explanation for the shortage - Held that the duty in respect of the shortage has been rightly demanded and the penalty had been rightly imposed.

Summary

Issues:
1. Shortage of finished goods and central excise duty implications.
2. Availment of cenvat credit based on photocopy of bill of entry.
3. Appeal against the Commissioner (Appeals) decision.

Analysis:

1. Shortage of Finished Goods and Central Excise Duty:
The case involved a discrepancy in the stock of M.S. Ingots at the respondent's factory, where the actual stock was found to be less than what was recorded in the RG-I Register. The central excise duty implications arose due to this shortage, leading to a demand for payment of duty amounting to Rs.27,755. The respondent attributed the shortage to a mistake in counting by an illiterate laborer but paid the duty on the shortfall. The appellate tribunal noted that the method of determining the weight of ingots was reasonable and the respondent failed to provide a satisfactory explanation for the significant shortage. Consequently, the tribunal upheld the duty demand and penalties imposed, setting aside the Commissioner (Appeals) decision.

2. Availment of Cenvat Credit Based on Photocopy of Bill of Entry:
The respondent had availed cenvat credit of additional customs duty based on a photocopy of the bill of entry, which was deemed invalid as there was no evidence of the original copy being lost. The tribunal cited previous judgments to support the position that cenvat credit cannot be claimed on a photocopy without certification of loss by the assessing officer. As the respondent did not have permission from the Assistant Commissioner to avail the credit in this manner, the tribunal ruled in favor of setting aside the Commissioner (Appeals) decision on this issue.

3. Appeal Against the Commissioner (Appeals) Decision:
The department had appealed against the Commissioner (Appeals) decision, which had set aside the Assistant Commissioner's order confirming the duty demand and cenvat credit issues. The tribunal, after considering arguments from both sides and reviewing the records, found in favor of the department. The tribunal set aside the Commissioner (Appeals) decision and restored the original order, allowing the Revenue's appeal and disposing of the respondent's cross objection.

In conclusion, the appellate tribunal's judgment addressed the issues of shortage of finished goods, cenvat credit based on a photocopy of the bill of entry, and the appeal against the Commissioner (Appeals) decision. The tribunal upheld the duty demand and penalties related to the shortage of goods, invalidated the cenvat credit claim based on an uncertified photocopy, and ruled in favor of the Revenue's appeal against the Commissioner (Appeals) decision.