2014 (1) TMI 374 - AT - Central Excise

Denial of Cenvat credit Credit taken on photocopies of Bills of Entry - Waiver of pre-deposit Held that - There is factual dispute of utilization of credit - The Commissioner has given a finding that the Bills of Entries were showing their address at Tiruvattiyoor where their Registered Office and one of their factories were functioning at the relevant time - Subsequently the licence for Tiruvattiyoor unit was surrendered - the Commissioner was not satisfied that the goods were received in their Ponneri factory where credit is taken - the applicant is directed to deposit Rupees Twenty lakhs as pre-deposit upon such submission rest of the duty to be stayed till the disposal Partial stay granted.

Summary

Issues: Waiver of pre-deposit of duty, denial of CENVAT credit based on photocopies of Bills of Entry, limitation period for demand, dispute of utilization of credit, requirement of original documents for credit, factual dispute of goods utilization.

Analysis:
1. The applicant sought waiver of pre-deposit of duty amounting to Rs.49,02,857/- along with interest and penalty. The denial of CENVAT credit during the period from Sept'05 to 2008 was based on the grounds that credit was claimed using photocopies of 12 Bills of Entry.

2. The advocate argued that the demand was time-barred and cited precedents stating credit cannot be denied based on photocopies of invoices. He emphasized that there was no dispute regarding the receipt and utilization of inputs, with no allegations of input diversion. Reference was made to tribunal decisions in similar cases.

3. The Revenue's representative contended that the goods imported were intended for a unit that was non-operational during the relevant period. It was highlighted that the Rules mandate credit to be claimed with original documents and there was a lack of clarity on the factory where the goods were utilized.

4. The Tribunal observed a factual dispute regarding the utilization of credit. The Commissioner found discrepancies in the Bills of Entry, indicating the goods were received at a location different from where the credit was claimed. The applicant was directed to deposit Rs.20,00,000/- within six weeks, with the remaining duty, interest, and penalty waived upon compliance. Recovery was stayed pending appeal resolution.

5. The judgment emphasized the importance of original documents for claiming credit and the need to establish the correct utilization of goods. The decision to require a partial deposit was based on the unresolved factual discrepancies. The case law cited by the advocate would be considered during the appeal hearing, indicating a further review of the matter.

6. In conclusion, the Tribunal's decision balanced the need for compliance with credit claiming rules and the applicant's assertion of no diversion or misuse of inputs. The partial deposit requirement aimed to address the unresolved factual issues while providing relief from the full pre-deposit amount pending appeal resolution.