2013 (11) TMI 1094 - AT - Central Excise

Cenvat credit without receipt of Input covered under the invoices Extended Period of Limitation Waiver of Pre-deposit Held that - The appellant had availed the cenvat credit of the inputs based upon the second stage dealer s invoices in the year 2006 and show cause notice has been issued to the appellant in March 2011 Relying upon PRAYAGRAJ DYEING & PRINTING MILLS PVT. LTD. Versus UNION OF INDIA 2013 (5) TMI 705 - GUJARAT HIGH COURT - the invocation of the extended period is incorrect in as much as when the assessee availed the cenvat credit he had documents which indicated the duty discharged and filed returns to the department - the appellant had produced the evidence of lorry receipt which would indicate the receipt of the inputs in their factory premises - the appellant has made out a prima facie case for the waiver of pre-deposit till the disposal stay granted.

Summary

Issues:
1. Confirmation of demand for ineligible cenvat credit, interest, and penalty.
2. Availment of cenvat credit based on second stage dealer's duty paying document.
3. Evidence presented by the appellant regarding receipt of inputs.
4. Statement of the second stage dealer contradicting vehicle numbers on invoices.
5. Invocation of extended period for show cause notice issuance.
6. Pre-deposit waiver based on evidence produced by the appellant.

Analysis:
1. The judgment addresses the confirmation of a demand for ineligible cenvat credit, interest, and penalty on the appellant by the adjudicating authority. The authority based its decision on the appellant allegedly taking cenvat credit without receiving the inputs covered under the invoices.

2. The appellant's representative argued that the cenvat credit was availed based on the second stage dealer's duty paying document for supplying inputs. It was contended that the first stage dealer had indeed supplied the inputs to the second stage dealer, who then provided them to the appellant. The appellant presented evidence of receipt of inputs in their factory premises, including a copy of the lorry receipt during the proceedings.

3. The Departmental Representative highlighted a statement from the second stage dealer, admitting discrepancies in the vehicle numbers on the first stage dealer's invoices, suggesting a potential issue with the supply chain.

4. The judge considered both sides' submissions and noted that the appellant had availed cenvat credit in 2006 based on the second stage dealer's invoices, with a show cause notice issued in 2011. Referring to a similar case before the High Court, it was observed that the appellant had documents indicating duty discharge and had filed returns, supporting the appellant's case. The evidence of the lorry receipt provided by the appellant indicated the receipt of inputs in their factory premises, leading to a prima facie case for waiving the pre-deposit of amounts involved, including individual penalties.

5. In conclusion, the judge allowed the applications for waiver of pre-deposit of the amounts involved and stayed the recovery until the disposal of appeals, considering the evidence presented by the appellant and the legal precedents cited during the proceedings.