2011 (2) TMI 1081 - AT - Central Excise

Cenvat credit wrongly availed - allegation that the appellants have taken credit on photocopy/zerox copy of the challans/invoices - Commissioner (Appeals) directed the appellants to make pre-deposit of 50% of duty and 50% of penalty - Held that - Commissioner (Appeals) directed the appellants to make pre-deposit, without looking into the merits for such demands - as the appellants have submitted before the lower appellate authority that they have taken credit on the basis of original invoice, which was not considered by the lower appellate authorities, the order to make a pre-deposit of 50% of duty and 50% of penalty is not sustainable. Hence, the impugned order is set aside and remand back to the Commissioner (Appeals) to decide the issue on merits without insisting the appellant to pre-deposit.

Summary

Issues:
Appeal against dismissal for non-compliance with Section 35F of the Central Excise Act, 1944 regarding credit on photocopy/zerox copy of challans/invoices.

Analysis:
The appellants filed an appeal against the impugned order, which dismissed their appeal due to non-compliance with Section 35F of the Central Excise Act, 1944. The issue revolved around the appellants taking credit on photocopy/zerox copies of challans/invoices, which was deemed inappropriate. The adjudication order confirmed the demand against the appellants, alleging they were not entitled to the credit. However, the appellants argued that they had taken credit based on the original copy of the invoice, which they presented to the authorities but was not considered. The Commissioner (Appeals) directed the appellants to make a pre-deposit of 50% duty and 50% penalty without delving into the merits of the demands. The appellants failed to comply, leading to the appeal's dismissal.

The case proceeded with none appearing on behalf of the appellants seeking an adjournment. Upon reviewing the facts, it was determined that the issue at hand was of narrow scope, prompting the appeal's final disposal. The impugned order was found to not address the merits, dismissing the appeal solely due to non-compliance with Section 35F. The appellant's claim of taking credit based on the original invoice, which was overlooked by the lower appellate authorities, rendered the pre-deposit order unsustainable. Consequently, the impugned order was set aside, and the case was remanded back to the Commissioner (Appeals) to decide on the merits without mandating the appellant to pre-deposit. The appeal was allowed by way of remand, emphasizing the need for a thorough review of the issue on its merits without the pre-deposit requirement.