2012 (6) TMI 248 - AT - Central Excise

Reversal of the CENVAT credit - the applicant has availed Cenvat Credit on the goods received in their factory and thereafter they issued debit Notes to the material suppliers - Held that - AS the demand has been raised on the debit notes issued by the appellant on their supplier without any explanation to it - since now they have produced a table showing explanation it needs re-examination at the end of the adjudicating authority - remand the matter to the original adjudicating authority to examine the issue afresh.

Summary

Issues:
Appeal against demand duty, interest, and penalty under Section 11AC of the Central Excise Act, 1944 due to availing Cenvat Credit on goods and issuing debit notes to material suppliers, discrepancies in records, remand for re-examination by the adjudicating authority.

Analysis:

The appellant, a manufacturer of automobile components, appealed against an order confirming the demand duty, interest, and penalty under Section 11AC of the Central Excise Act, 1944. The appellant had availed Cenvat Credit on goods received in their factory and subsequently issued debit notes to material suppliers, leading to a demand for payment of duty on the amount of reversal via debit notes, along with interest and penalty. The Commissioner (Appeals) found discrepancies in records but dropped the demand concerning certain debit notes worth Rs.69,000. During the hearing, the appellant produced a statement explaining the debit notes raised against their material suppliers. Both parties requested a remand for verification and correlation by the adjudicating authority.

The Tribunal considered the submissions and decided to dispose of the appeal at that stage, granting waiver of pre-deposit of demands. However, due to the appellant's inability to satisfactorily explain the debit notes before the adjudicating authority and the Commissioner (Appeals), the matter was remanded to the original adjudicating authority for re-examination. The appellant presented a table with explanations that required further scrutiny. The Tribunal emphasized affording a reasonable opportunity for the appellant to present their case before passing an appropriate order. The appeal was allowed by way of remand, keeping all issues open for reconsideration.

In conclusion, the appeal against the demand duty, interest, and penalty under Section 11AC of the Central Excise Act, 1944 was disposed of by remanding the matter to the original adjudicating authority for re-examination. The appellant's explanations regarding the issued debit notes needed further assessment, emphasizing the need for a fair opportunity for the appellant to present their case. The appeal and stay application were both resolved in this manner, ensuring thorough scrutiny and reconsideration of all relevant issues.