2016 (2) TMI 867 - AT - Central Excise

Wrong availment of CENVAT credit - credit availed by the appellant in respect of 11 invoices stands denied on the sole ground that there are no corresponding GRNs and bin cards - Held that - The appellants have explained that out of the huge number of invoices being received by them, such non-maintenance or non-availability of GRNs and BIN cards cannot be held to be leading to the conclusive findings of non-receipt of inputs. Also find force in the above contention of the learned advocate. The Revenue has not made any enquiries from the sender of the inputs, as reflected in the invoice. The appellants have recorded the invoices, inputs along the available CENVAT credit in their statutory records. Also find force in the appellant s contention that in the absence of the inputs in question, corresponding final products could not have been manufactured by them. The non-availability of the said documents which are not even the prescribed documents in terms of the CENVAT Credit Rules and the purpose of which is only to show the receipt of the materials at the factory gate, cannot be held to be conclusive evidence so as to arrive at a finding of the non-receipt of the goods. In the absence of any corroborative evidence, find no merits in the Revenue s stand. Accordingly, the impugned orders are set aside and the appeal is allowed in favour of assessee

Summary

Issues:
- Wrong availment of CENVAT credit without receiving inputs
- Denial of credit based on non-availability of GRNs and BIN cards for 11 invoices
- Appeal against order confirming demand, interest, and penalty

Analysis:
1. The appellant, engaged in manufacturing sheet metal enclosures and mechanical assemblies, availed CENVAT credit on duty paid inputs for their final products under Chapter 84 and 85 of the Central Excise Tariff Act, 1985.

2. Central Excise officers visited the appellant's factory and found 11 invoices without corresponding Goods Receipt Notes (GRNs) and BIN cards, suspecting wrongful CENVAT credit availment. Statements were recorded, initiating proceedings alleging a credit of Rs. 5,75,782 wrongly availed from June 2007 to January 2008.

3. The Additional Commissioner's order confirming the demand, interest, and penalty was upheld by the Commissioner (Appeals), leading to the present appeal challenging the denial of credit based on missing GRNs and BIN cards for 11 invoices.

4. The appellant argued that out of approximately 1200 invoices received annually, the absence of GRNs and BIN cards for 11 invoices shouldn't lead to credit denial. They maintained all necessary documents, and the inputs were accounted for in the CENVAT credit account, essential for producing final products cleared after duty payment.

5. The Revenue, represented by the Assistant Commissioner, supported the lower authorities' findings, emphasizing the missing documents as grounds for credit denial.

6. The Judicial Member analyzed the situation, noting that the denial was solely based on the absence of GRNs and BIN cards for 11 invoices. The appellant's explanation, supported by statutory records and the necessity of inputs for final product manufacturing, was deemed valid. Lack of inquiries from the input senders and absence of conclusive evidence led to overturning the lower authorities' decision.

7. The judgment set aside the impugned orders, allowing the appeal with relief to the appellant due to insufficient evidence supporting the Revenue's stance. The plea of limitation was not addressed as the appeal succeeded on merit.