2011 (7) TMI 874 - AT - Central Excise

Irregular CENVAT credit - Suppression of facts - Held that the lower authorities did not give any findings regarding the report of Central Excise authorities at the suppliers end in case of the invoices on the basis of which the whole case is built which requires reconsideration In case of shortages of 9.975 M.T. the appellant is aggrieved by the computation of the quantum of the shortages - Decided in favor of the assessee by way of remand

Summary

Issues:
1. Failure to take CENVAT credit on the basis of valid documents under Rule 57AE of Central Excise Rules, 1944.
2. Allegation of shortage of finished goods and clandestine removal.
3. Discrepancies in invoices and genuineness of documents.
4. Role of the Tribunal as a fact-finding authority.
5. Remand of the case to the lower adjudicating authority for reconsideration.

Analysis:
1. The appellant, engaged in manufacturing M.S. Ingots, appealed against the Commissioner (Appeals) order upholding the lower authority's decision regarding the failure to take CENVAT credit based on valid documents under Rule 57AE of Central Excise Rules, 1944. The appellant contended that the availed credit was unintentional and genuine mistakes might have occurred. The lower authority confirmed the proposal, leading to the appeal.

2. The department alleged a shortage of 9.975 M.T of finished goods compared to the RG I register, hinting at clandestine removal. The appellant argued that the shortage could be due to accounting errors in the stock register. The SDR highlighted discrepancies in invoices and the statement of the Managing Director admitting unknowingly availing credit, which was reversed promptly upon discovery.

3. The discrepancies in invoices and the genuineness of documents were crucial points of contention. The appellant claimed that most invoices were accurate, while the SDR argued that no details in the invoices matched. The SDR also referenced a statement by the Manager admitting suppressed production and readiness to pay excise duty for the period in question.

4. The Tribunal, as the final fact-finding authority, was tasked with reviewing the case. The Tribunal noted that the lower authorities had not adequately addressed the report of Central Excise authorities regarding the invoices, necessitating reconsideration. The role of the Tribunal was clarified as not replicating the lower authorities' functions but ensuring proper examination of the case.

5. Ultimately, the case was remanded to the lower adjudicating authority for a fresh decision. Both parties were allowed to submit additional documents, and a prompt resolution within three months was emphasized due to the case's prolonged pendency since 2001. The Tribunal directed a thorough review of the issues, including the CENVAT credit utilization and the alleged shortages, for a fair and comprehensive decision.