2014 (1) TMI 157 - AT - Central Excise

Denial of cenvat credit on Inputs Valid documents not used Waiver of Pre-deposit Held that - The appellant s claim of having used proper invoices for taking CENVAT credit has not been substantiated - the documents were washed away in floods is a story difficult to believe - Xerox copies of invoices are not acceptable for CENVAT credit purpose appellant is not able to establish a prima facie case in their favour - the appellant is directed to deposit an amount of Rupees One Lakh as pre-deposit upon such submission rest of the duty to be stayed till the disposal partial stay granted.

Summary

Issues:
1. Waiver and stay sought for adjudged dues including CENVAT credit and penalty.
2. Denial of credit on inputs due to lack of valid documents.
3. Claim of using invoices issued by input suppliers.
4. Original documents washed away in floods, xerox copies produced.
5. Deputy Commissioner reiterates findings of original and appellate authorities.
6. Substantiation of proper use of invoices for CENVAT credit.
7. Acceptability of xerox copies for CENVAT credit.
8. Plea of limitation against the demand.
9. Direction for pre-deposit of a specific amount within a stipulated timeframe.
10. Compliance reporting to Deputy Registrar.
11. Waiver and stay on penalty subject to due compliance.

Analysis:
The judgment pertains to an application seeking waiver and stay regarding adjudged dues, specifically CENVAT credit and penalty. The appellant's claim revolves around the denial of credit on inputs received in the factory from September 2003 to February 2008 due to the absence of valid documents. The appellant asserts that they utilized invoices issued by input suppliers for claiming credit, despite the original documents being destroyed in floods. The Deputy Commissioner, representing the respondent, supports the decisions of the original and appellate authorities, emphasizing the denial of credit based on document insufficiency.

Upon evaluating the submissions, the judge finds the appellant's argument regarding the use of proper invoices for CENVAT credit unsubstantiated. The claim of documents being lost in floods is deemed dubious, with xerox copies of invoices considered inadequate for CENVAT credit purposes. Furthermore, the appellant's counsel raises a limitation plea against the demand. Consequently, the judge directs the appellant to pre-deposit a specified amount of Rs.1,00,000 within six weeks. The compliance with this directive is to be reported to the Deputy Registrar by a specified date. Upon satisfactory compliance, a waiver and stay on the penalty imposed, as well as the remaining CENVAT credit and associated interest, will be granted.

In conclusion, the judgment underscores the importance of substantiating claims with valid documentation for CENVAT credit purposes, highlighting the necessity of compliance with procedural directives to secure relief from penalties and dues.