2014 (5) TMI 1014 - AT - Central Excise

CENVAT Credit - Dispute relates in respect of Cenvat credit availed on imported aluminum scrap under the Bills of Entries inasmuch as duty was paid not in cash but was deposited in the DEPB - Held that - Cenvat credit of duty in respect of imported inputs on which duty has been debited through DEPB cannot be denied in as far so w.e.f. 28.1.04. Para 4.3.5 of the Foreign Trade Policy has been amended where under duty debited through DEPB has been made admissible for Cenvat credit or for drawback claim w.e.f. 28.1.04. In the present case the Cenvat Credit denied to the Appellants pertain to the period April 2004 onwards i.e. after the amendment of Para 4.3.5 of the Foreign Trade Policy - no justifiable reasons to interfere in the same in the absence of any evidences supporting the revenue allegations, Commissioner (Appeals) has rightly set aside the confirmation of demands against the assessee - Decided against Revenue.

Summary

Issues: Alleged shortages of aluminum sections, clearance of aluminum wastage without duty payment, availing Cenvat credit on imported aluminum scrap, dispute over Cenvat credit availed on imported aluminum scrap.

In the judgment delivered by Ms. Archana Wadhwa of the Appellate Tribunal CESTAT NEW DELHI, the case revolved around the visit of Central Excise Officers to a factory where they discovered shortages of aluminum sections, clearance of aluminum wastage without duty payment, and availing of Cenvat credit on imported aluminum scrap. The officers found discrepancies amounting to duty liabilities. The dispute also involved the availing of Cenvat credit on imported aluminum scrap under Bills of Entries where duty payment was made through DEPB instead of cash. The proceedings initiated against the factory resulted in demands being confirmed. However, the Commissioner (Appeals) allowed the appeal, except for the found goods or aluminum wastage. The Commissioner observed that the allegation of substituting imported aluminum scrap with locally procured scrap could not be proved by the Department due to lack of evidence. The Commissioner highlighted the necessity for the Department to provide concrete proof and reasoning behind the allegations. Additionally, the Commissioner held that Cenvat credit on imported inputs, where duty was debited through DEPB, cannot be denied post an amendment in the Foreign Trade Policy from 28.1.04. The Commissioner emphasized that the denial of Cenvat credit post the policy amendment was unjustifiable.

Upon reviewing the Commissioner (Appeals) findings, Ms. Archana Wadhwa found no valid reasons to interfere as there was a lack of evidence supporting the revenue's allegations. She agreed with the Commissioner that in the absence of concrete evidence, the confirmation of demands against the assessee was rightly set aside. Consequently, the revenue's appeal was rejected. The judgment highlighted the importance of substantial evidence and adherence to legal provisions in proving allegations related to duty liabilities and Cenvat credit availed on imported materials.