2014 (2) TMI 347 - AT - Central Excise

Denial of MODVAT Credit - Imposition of penalty - Inputs had been cleared twice in the same truck under two different invoices and the time of preparation/removal varied from 5 to 10 minutes during which period - Held that - adjudicating authority could have verified from the jurisdictional Range office of supplier whether they have paid duty or not. The supplier have not been issued any show cause notice that they have not paid duty and this proves that duty has been paid on the said goods as received by the appellant. Further the appellant had made running payments to the supplier through Cheques/ Demand Drafts against the inputs received from said suppliers. Revenue in their memo of appeal have not been able to effectively rebut the above finding of the Commissioner (Appeals) except to show the invoices were made at a time gap of 5 to 15 minutes. As rightly held by Commissioner (Appeals), the goods involved in all these invoices can be transported in one truck load and there being no other evidence on record, the said fact cannot be adopted in prejudice to the assessee s case - Decided against Revenue.

Summary

Issues involved:
1. Denial of modvat credit and imposition of penalty based on the allegation of goods being cleared twice in the same truck under different invoices within a short time frame.
2. Examination of invoices, Octroi Receipts, and G.Rs to determine the possibility of loading goods covered under multiple invoices in the same truck.
3. Verification of the authenticity of records presented by the Appellant in support of their case.
4. Comparison of legal precedents regarding the denial of credit based on missing details in invoices.
5. Evaluation of the Revenue's appeal challenging the Commissioner (Appeals) order.

Issue 1: Denial of modvat credit and imposition of penalty
The case revolved around the Revenue's contention that the Appellant cleared goods twice in the same truck under different invoices within a short time frame, which they deemed physically impossible. The Hon'ble Tribunal observed that goods covered under multiple invoices prepared within a 5 to 15-minute gap were dispatched in one truck simultaneously. Consequently, the matter was remanded to the Adjudicating Authority for a fresh decision, considering G.Rs and Octroi Receipts submitted by the Appellant.

Issue 2: Examination of invoices, Octroi Receipts, and G.Rs
The Commissioner (Appeals) carefully examined the case records and submissions by the Appellant. It was noted that the quantity mentioned on the invoices allowed for loading goods from multiple invoices in the same truck. The Appellant provided Octroi Receipts, G.Rs, and other records supporting the receipt and use of inputs in manufacturing final products, enhancing the credibility of their claims.

Issue 3: Verification of record authenticity
The Commissioner (Appeals) emphasized the authenticity of the statutory register reflecting input receipts and usage in manufacturing final products over private records. The absence of objections from the Department regarding duty payment on final products and the Appellant's production of relevant documents further strengthened their case. Additionally, the Appellant's consistent payments to suppliers via Cheques and Demand Drafts indicated compliance and regular transactions.

Issue 4: Legal precedents and missing details in invoices
Citing legal precedents like Neera Enterprises vs. CCE and Gomti Engineering Works vs. CCE, the Commissioner (Appeals) highlighted that credit denial based on missing details in invoices, such as mode of transport or vehicle number, was not justified as long as duty payment was confirmed. These precedents supported the Appellant's position and contributed to the rejection of the Revenue's appeal.

Issue 5: Evaluation of Revenue's appeal
The Revenue's appeal failed to effectively challenge the Commissioner (Appeals) findings, primarily focusing on the time gap between invoice preparation. As per the Commissioner (Appeals) and subsequent affirmation, the goods covered in the invoices could feasibly be transported in one truck, and lacking substantial evidence, the appeal was dismissed. The order was upheld, affirming the Commissioner (Appeals) decision in favor of the Appellant, rejecting the Revenue's appeal.

---