2008 (2) TMI 267 - AT - Central Excise

Credit denied on the ground that in respect of 20 GP-1 in question respondent had not received the inputs they had only received the duty paying document -inputs were received under the duty paying documents & were duly entered in statutory record - The same were used in the manufacture of final product which was cleared on payment of duty - no verification was conducted by revenue at the premises of respondent to show shortage of raw material - credit cant be denied

Summary

Issues:
1. Denial of Modvat credit in respect of certain GP-1s.
2. Allegation of non-supply of raw material by the supplier.
3. Disallowance of credit based on vehicle numbers in duty paying documents.
4. Lack of verification of raw material shortage at respondent's premises.

Analysis:

Issue 1: The appeal was filed by the Revenue against the impugned order allowing the benefit of Modvat credit in respect of certain GP-1s. The show cause notice alleged that the respondent had not received the inputs but only the duty paying document for 20 GP-1s. The Adjudicating Authority denied the credit and imposed a penalty. The Commissioner (Appeals) disallowed the credit for duty paying documents with incorrect vehicle numbers but allowed it for documents with correct vehicle numbers, stating that the inputs were received and used in the manufacture of excisable goods.

Issue 2: The Revenue contended that the inputs were not supplied by the supplier as per the statement of their Authorized Representative, and some dealers were non-existent. However, the respondent maintained that they received the inputs as per statutory records and used them in manufacturing. The Commissioner (Appeals) found that the inputs were received under duty paying documents and used in the final product, without any verification showing raw material shortage at the respondent's premises.

Issue 3: The impugned order disallowed credit when vehicle numbers in duty paying documents were not trucks, but allowed it when the numbers were of trucks. The Commissioner (Appeals) concluded that the inputs were received and used in manufacturing, as evidenced by statutory records. The lack of verification of raw material shortage further supported the decision to dismiss the appeal.

Issue 4: The Tribunal found no infirmity in the impugned order, as the evidence showed that the inputs were received and used in manufacturing the final product. The lack of verification of raw material shortage, combined with the undisputed duty payment for the inputs, led to the dismissal of the appeal by the Tribunal.

In conclusion, the Tribunal upheld the decision to allow Modvat credit for inputs used in manufacturing, based on the evidence presented and the lack of verification showing any raw material shortage. The appeal filed by the Revenue was dismissed, affirming the Commissioner (Appeals) decision in favor of the respondent.