2018 (4) TMI 1672 - AT - Central Excise

CENVAT Credit - duty paying documents - some of the records destroyed by the fire - Rule 9(2) of CCR 2004 - Held that - The Appellant have maintained proper records and they had received the duty paying documents which stands confirmed from the proper records available and details mentioned in the Cenvat Register and further proved by the production of partially damaged documents before the Original Adjudicating Authority prove their bona fides - there is no adverse material on record for disallowing the Cenvat in part. The SCN is presumptive and hence not maintainable - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Disallowance of Cenvat credit due to loss of documents in a fire incident.
- Rejection of partially damaged invoices and attested photocopies.
- Appeal against the rejection of Cenvat credit before Commissioner (Appeals).
- Appeal before the Tribunal challenging the rejection of Cenvat credit.

Analysis:
1. The appellant, a manufacturer of electrical apparatus, faced disallowance of Cenvat credit amounting to ?3,68,275 due to the loss of documents in a fire incident at their Chartered Accountant's office. The Revenue contended that the appellant had taken credit without proper duty paying documents and issued a show cause notice proposing disallowance and penalty.

2. The appellant contested the notice, presenting retrieved invoices and partially damaged documents. They argued that they had proper Cenvat paying documents and relied on a Bombay High Court ruling. The Deputy Commissioner accepted a portion of the credit but disallowed the rest, stating the appellant lacked possession of necessary documents.

3. The appellant's appeal before the Commissioner (Appeals) was rejected, leading to a further appeal before the Tribunal. The appellant argued that they had maintained proper records, received duty paying documents, and the fire incident caused the document loss. They also highlighted the availability of supplier details in the Cenvat Register.

4. After considering the contentions, the Tribunal found the appellant had maintained proper records, received duty paying documents, and proved their bona fides by producing partially damaged documents. The Tribunal deemed the show cause notice presumptive and allowed the appeal, setting aside the partial disallowance of Cenvat credit and granting the appellant the entire credit of ?3,68,275.

This judgment showcases the importance of maintaining proper records, proving receipt of duty paying documents, and demonstrating bona fides in cases of document loss due to unforeseen incidents like fires. The Tribunal's decision emphasizes the need for concrete evidence and adherence to legal procedures in tax credit disputes.