2014 (8) TMI 369 - AT - Central Excise

Denial of CENVAT Credit - Misplacement of invoices - Held that - Revenue s case in the show cause notice is for denial of credit availed in respect of 52 invoices on the sole ground that they have failed to produce said 52 invoices. Though the show cause notice is not available on record, but the said fact become clear from the earlier order of the Commissioner as also from the order of the Tribunal. As such, when the Tribunal remanded the matter with specific direction to examine the 52 invoices, which also stand examined by the Commissioner, it was not open to the Commissioner to decide the matter on the basis of percentage use of strips in question. In as much as there is no dispute about 52 invoices having produced by the appellant on record, I find no justifiable reason to deny the Cenvat credit to the appellants. decided in favour of assessee.

Summary

Issues: Disposal of appeals arising from the same impugned order confirming duty, penalty, and interest against a company, along with penalties on individuals under Cenvat Credit Rules, 2001-2002.

Analysis:
1. The appellants, engaged in manufacturing sound recording apparatus, availed Cenvat credit without producing 52 invoices, leading to proceedings initiated against them. The Commissioner confirmed the demand and penalties, disregarding the appellant's claim of misplacement of invoices.

2. The Tribunal, in Final Order No. 417-419/2004 NB(C), remanded the matter for de novo adjudication after the appellants produced photocopies and original duplicate transporters' invoices. The Tribunal emphasized the need for reconsideration due to the new evidence presented.

3. Upon readjudication, the Commissioner verified the duplicate cenvatable invoice and original/triplicate copies produced by the appellant. Instead of focusing on the disputed invoices, the Commissioner delved into calculating CRCA strips consumption per piece, leading to a demand confirmation based on different strip quantities.

4. The appellants argued that investigations from a third party unit should not impact credit availed for manufacturing DC Micromotors and toys, besides TDMs and CD mechanisms. They contended that the Commissioner's inquiries should not affect their credit entitlement.

5. The Tribunal noted that the Revenue's case centered on denying credit for the 52 missing invoices, a fact highlighted in previous orders. As the Tribunal had directed examination of these invoices, and since they were produced and examined by the Commissioner, denying credit based on strip usage percentage was deemed unjustifiable.

6. Given the undisputed production of the 52 invoices, the Commissioner's decision to deny Cenvat credit based on strip usage was deemed inappropriate. Consequently, the impugned order was set aside, and all three appeals were allowed with consequential relief to the appellants.