2015 (2) TMI 877 - AT - Central Excise

CENVAT Credit -Invoices addressed to head office and not to the appellant's premises - Held that - since the issue relates to initial period of introduction of new procedure for registration of principal manufacturer in the case of garments and not the job workers, the mistakes happened and accordingly has allowed the credit of ₹ 2.39 crores, out of demand for more than ₹ 2.53 crores. However, he has disallowed credit of ₹ 13,44,955/- on the ground that no documentary evidence was produced to indicate actual receipt and use of inputs/capital goods under the invoices mentioned in the table either at Bommasandra or at job working units. It is surprising that out of demand for more than ₹ 2.53 crores probably arising because of the observations based on sample invoices, the Commissioner chooses to allow the credit of more than ₹ 2.39 crores but disallows only the balance which are covered by the sample invoices collected at random. Nevertheless, the learned counsel submitted that she will be able to show that the goods have been received, utilized and finished goods have been manufactured and duty has been paid.Therefore both sides agreed that the matter should be remanded to consider these evidences. At this stage, we also observe that now that the impugned order has been passed, either the seized documents or the copies of the seized documents should be provided to the appellants before fresh adjudication is taken up. Appellants have already reversed the amount disallowed which according to them has been wrongly taken. She submits that ₹ 9,33,163/- should not have been disallowed and credit has been taken correctly. This also can be verified when the matter is adjudicated again. -In respect to wrong availment of credit on plastic crates, pellets etc. appellants have deposited the entire amount of CENVAT credit disallowed and a small amount according to the learned AR has not been paid. The learned counsel undertook to verify the correctness of the reversal made by them and ensure that entire amount disallowed would be paid. - Mater remanded back - Decided in favour of assessee.

Summary

Issues:
1. Availment of credit based on invoices addressed to head office
2. Denial of CENVAT credit on basic customs duty in respect of inputs from 100% EOU
3. Wrong availment of credit on plastic crates and pellets

Analysis:
1. The first issue pertains to the appellant's credit based on invoices addressed to the head office. The Commissioner allowed credit of &8377; 2,39,98,043 but disallowed &8377; 13,44,955 due to lack of evidence of actual receipt and use of goods. The appellant argued that documents proving receipt and utilization were seized by the Department. The Tribunal observed discrepancies in the Commissioner's order, noting that while some invoices were addressed to the head office, goods were received at job workers' premises. Both parties agreed to remand the matter for further consideration, emphasizing the need to provide seized documents before fresh adjudication.

2. The second issue concerns the denial of CENVAT credit amounting to &8377; 18,21,988, as the appellant allegedly claimed credit on basic customs duty for inputs from a 100% EOU. The appellant contended that they had reversed the disallowed amount and that &8377; 9,33,163 was correctly claimed. The Tribunal suggested verifying this during the upcoming adjudication process.

3. The final issue involves the erroneous availment of credit on plastic crates and pellets. The appellant had already deposited the entire disallowed CENVAT credit amount, except for a small sum as per the Department. The appellant assured to confirm the correctness of the reversal and pay the remaining amount. Consequently, the Tribunal ordered a remand to the original adjudicating authority for a fresh adjudication based on the observations made, thereby disposing of the stay petition.

This detailed analysis of the judgment highlights the key issues addressed by the Tribunal, the arguments presented by the parties, and the Tribunal's decision to remand the matter for further consideration and adjudication.