2016 (1) TMI 383 - AT - Central Excise

Denial of CENVAT Credit - air conditioners installed in office of the factory - whether the credit is admissible on re-constructed copies of bill of entry - Held that - Appellant had originals of the documents in dispute. They lost the documents and FIR has also been lodged for the same. During the time of audit, the appellants could not place the original documents before the officers. But, however, they placed the photocopies. The credit was denied for the reason that bills of entry are photocopies. Later, they obtained reconstructed copies of these documents. Credit availed on reconstructed copies was also denied. It is seen from the documents that these reconstructed bills of entry have been attested as true copies by the officers of customs. By such authentication and attestation by the concerned officers of Customs Authorities, the copies of bills of entry have, in our view, become proper duty paying documents. The genuineness of the documents having been established the denial of credit is unjustified The receipt of inputs in the factory and duty paid upon them is not disputed. The Cenvat Credit Rules, 2002 do not provide any time limit for availing credit on inputs or capital goods. - In Board s Circular No.943/4/2011-CX dated 29.04.2011, it is mentioned that goods such as furniture and stationery used in an office within the factory are goods used in the factory and are used in relation to the manufacturing, business and hence, the credit on the same is to be allowed . Therefore, credit on duty paid on air conditioners installed in office of the factory is admissible. - Decided in favour of assessee.

Summary

Issues:
Admissibility of credit on re-constructed copies of bill of entry.

Analysis:

1. Background and Facts: The appellants, engaged in manufacturing pneumatic tyres, availed cenvat credit on inputs, capital goods, and input services. The department observed that the appellants took credit on photocopies of bills of entries as the originals were lost. A show cause notice was issued proposing disallowance of credit on various grounds. The order-in-original confirmed the demand and imposed penalties, which was partially modified by the Commissioner (Appeals). The appellant then filed an appeal before the Tribunal against the Commissioner's order.

2. First Appeal (E/1789/2006): The main issue was the disallowance of credit on photocopies of bills of entries. The appellants obtained re-constructed bills of entry during the pendency of the appeal and availed credit on them. However, this credit was also reversed following objections by the Audit party. A subsequent show cause notice was issued, and after adjudication, the disallowance of credit on re-constructed bills of entry was confirmed by the order-in-original. The Commissioner (Appeals) upheld this decision, leading to the appeal no.E/1519/2007 against the Commissioner's order.

3. Dispute and Decision: The core dispute revolved around the admissibility of cenvat credit on re-constructed copies of bills of entry. The appellant had the originals but lost them, lodging an FIR for the same. The credit was initially denied due to the bills being photocopies. Subsequently, the appellants obtained re-constructed copies, which were also denied credit. However, these re-constructed bills were attested as true copies by Customs Authorities, making them proper duty paying documents. The Tribunal held that the denial of credit on re-constructed copies was unjustified.

4. Time Limit for Availing Credit: Another ground for denying credit was that some documents were more than a year old. However, the Cenvat Credit Rules, 2002 do not specify any time limit for availing credit on inputs or capital goods. Therefore, the contention of the Revenue on this point was dismissed.

5. Verification of Re-constructed Documents: The Revenue argued for a chance to verify the re-constructed documents, but the Tribunal deemed it unnecessary as both appeals pertained to the same issue. The Tribunal also rejected the Revenue's objection to considering the re-constructed bills as additional evidence, as they were part of the records and not disputed in either adjudication.

6. Precedent and Conclusion: Referring to a previous Tribunal judgment, the Tribunal held that credit should not be denied solely for bills of entry being re-constructed copies. Following this precedent and the facts of the case, the Tribunal concluded that the appellant was entitled to avail credit on re-constructed copies of bills of entry. The issues were held in favor of the appellant, and the impugned orders were set aside, allowing the appeals with any consequential reliefs.

In conclusion, the Tribunal ruled in favor of the appellant, allowing the admissibility of credit on re-constructed copies of bill of entry and dismissing the Revenue's grounds for denial of credit.