2013 (12) TMI 507 - AT - Central Excise

Cenvat credit under Rule 16 of the Central Excise Rules - Appellant contended that even though the transformers have not been received under original or duplicate copy of the invoices, the same can be linked with the invoices under which the same had been cleared on the basis of CT numbers embossed on the Transformers Revenue contended that the CT numbers as recorded in the RG-23A register in respect of the returned transformers do not match with the CT numbers as mentioned in the respective invoices on the basis of which the credit had been taken - This is a question of fact which can be gone into in detail only at the time of final hearing - this is not the case for total waiver. Duty Demand Held that - The show cause notice itself mentions, the goods in respect of which duty has been demanded, as non-excisable goods thus there is no basis on which the duty had been demanded - Whenever they used non-Cenvat credit availed inputs for repair, there is no reversal of Cenvat credit, but still these parts having been sold are reflected in the balance sheet - only Cenvat credit on cenvated parts used in repairs is required to be reversed - as the duty demand is concerned, the appellant have prima facie case in their favour - Decided partly in favour of Assessee.

Summary

Issues:
1. Availment of Cenvat credit under Rule 16 for transformers returned without original invoices.
2. Duty demand based on discrepancies in sale figures of non-excisable goods.

Analysis:

1. The first issue revolves around the appellant's claim of Cenvat credit amounting to Rs.5,31,031/- for transformers returned for repair without original invoices. The appellant argued that they linked the returned transformers with triplicate copies of invoices based on CT numbers embossed on the transformers. However, the department objected, stating that the CT numbers in the RG-23A register did not match those in the invoices. The tribunal acknowledged this as a factual matter requiring detailed scrutiny at the final hearing, thus ruling against total waiver of the demand.

2. The second issue concerns a duty demand of Rs.3,92,578/- due to discrepancies in the sale figures of non-excisable goods. The show cause notice alleged a difference in values reported in the records, leading to the duty demand. However, the tribunal noted that the goods in question were non-excisable, raising doubts about the basis for the duty demand. Furthermore, the tribunal found that the Commissioner (Appeals) failed to address the appellant's argument that duty should only apply to cenvated parts used in repairs, not the entire repair activity. Consequently, the tribunal held that the appellant had a prima facie case in their favor regarding the duty demand.

In light of the above analysis, the tribunal directed the appellant to deposit Rs.1,00,000/- towards the Cenvat credit demand within four weeks. Upon compliance, the requirement for further pre-deposit of the remaining amount, duty demand, interest, and penalties was waived for hearing the appeals, with recovery stayed until the appeals' disposal.