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2013 (11) TMI 846 - AT - Central ExciseDenial of Cenvat credit Onus to prove Cenvat credit taken on the basis of extra copy invoices - Held that - The appellant was required to establish with documentary evidences and records maintained by them, that all the inputs/capital goods were received in their Unit-I under proper documents and were in fact used in their present unit - On the contrary, appellant is trying to explain that it does not make any difference if documents are not in the name of the appellant but in the name of other unit of the same group of companies - the appellant has got five units and credit is taken on the basis of extra copies of invoice, or on the basis of invoices in the name of other units, Department has every right to ask the appellant to justify the receipt of the inputs/ capital goods in the factory and its use in the factory of the appellant. Under Rule 9(5) of the CENVAT Credit Rules, 2004, the onus is on the appellant to take appropriate care and satisfy himself properly regarding admissibility of credit before taking the credit - receipt of goods in the factory premises of the appellant has not been established by the appellant thus, CENVAT Credit has been correctly denied as its receipt and use in the factory of the appellant is not established Decided against Assessee. Penalty under Rule 15(2) of CENVAT Credit Rules, 2004, r.w Section 11AC of the Central Excise Act, 1944 and under Rule 25 (1)(a) of Central Excise Rules, 2002 Held that - The penalty is not attracted in the case because it has not been brought out and established by the Revenue that CENVAT Credit available in appellant s CENVAT Credit account at any stage for the period March 2004 to March 2007 was less than Rs.8,62,554/- so that the goods cleared can be considered to have been cleared without payment of duty - in recorded transactions, there cannot be any intention to evade any Central Excise duty when the credit is got recovered from the appellant thus, penalty imposed upon the appellant under Rule 25(1) of Central Excise Rules, 2002 set aside Decided in favour of Assessee.
Issues:
1. Availment of CENVAT Credit on the basis of extra copy invoices, capital goods, and invoices in the name of other units. 2. Denial of CENVAT Credit and imposition of penalty under CENVAT Credit Rules, 2004. 3. Justification of CENVAT Credit availed by the appellant. 4. Applicability of penalty under Rule 15(2) of CENVAT Credit Rules, 2004, and Rule 25(1)(a) of Central Excise Rules, 2002. Analysis: Issue 1: Availment of CENVAT Credit The appellant availed CENVAT Credit amounting to Rs.8,62,554/- based on extra copy invoices, capital goods, and invoices in the name of other units. The officers observed discrepancies in the availed credit, leading to the denial of credit by the authorities. The appellant argued that the credit was admissible as the inputs/capital goods were used in their present unit for manufacturing finished goods. However, the authorities emphasized the irregularities in credit availed, especially when documents were not in the appellant's name or lacked proper validation. Issue 2: Denial of CENVAT Credit and Imposition of Penalty The authorities proposed to deny CENVAT Credit due to discrepancies in availing credit, including using extra copy invoices and invoices not related to the appellant's unit. The burden was on the appellant to establish the correctness of the credit taken. The appellant's attempt to justify the credit availed based on the group of companies and multiple units was not accepted as the receipt and use of goods in the factory were not adequately proven. Consequently, the denial of CENVAT Credit was upheld by the authorities. Issue 3: Justification of CENVAT Credit The appellant failed to establish the receipt of goods in the factory premises adequately, leading to the denial of CENVAT Credit. Despite arguments regarding the admissibility of credit based on the usage of inputs/capital goods in their present unit, the authorities found the appellant's explanations insufficient to validate the credit availed. The appellant's reliance on case laws was deemed inapplicable to the specific circumstances of the case. Issue 4: Applicability of Penalties Regarding the imposition of penalties under CENVAT Credit Rules, 2004, and Central Excise Rules, 2002, the appellant argued against misstatement and suppression with the intention to evade duty. The authorities noted that the inadmissible CENVAT Credit was reversed before the show cause notice, and penalties were not justified based on the lack of specific evidence of intention to evade duty. Consequently, the penalties imposed were set aside, and the appeal on non-imposition of penalties was allowed. In conclusion, the judgment upheld the denial of CENVAT Credit due to discrepancies in availing credit and set aside the penalties imposed on the appellant under the relevant rules.
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