2007 (9) TMI 161 - AT - Central Excise

Invoice issued by depot shows higher payment of duty than actually paid Credit availed on basis of these documents, higher than the actual duty paid on inputs is not admissible So demand is upheld - By considering facts of the case penalty is unsustainable.

Summary

Issues: Appeal against dropping of proceedings for recovery of excess Cenvat credit.

Analysis:
1. Issue of Excess Cenvat Credit: The appeal was filed by the revenue against the impugned order dropping the proceedings initiated for the recovery of excess Cenvat credit. The respondents were found to have received inputs with excess Cenvat credit passed on by the registered dealer, leading to show cause notices being issued. The adjudicating authority confirmed the demand and imposed a penalty, which was later allowed on appeal by the Commissioner (Appeals).

2. Contention of Revenue: The revenue contended that the respondents were not entitled to Cenvat credit higher than the actual duty paid on the inputs. It was argued that the duty was paid at the time of clearance from the refinery, and the invoices from the depot showed higher duty payment than the actual amount paid at the refinery. The revenue insisted that the excess credit should have been recovered from the dealer who issued the invoices.

3. Contention of Respondents: The respondents argued that if the registered dealer issued invoices with higher duty payment, the revenue should have recovered the excess from the dealer directly. They relied on previous Tribunal decisions where it was held that in cases where credit was availed based on dealer invoices, and excess credit was passed on to customers, the revenue should recover the disputed amount from the dealers directly.

4. Decision and Analysis: The Tribunal analyzed the case and found that the facts differed from the previous cases cited by the respondents. In the present case, the invoices from the dealer showed higher duty payment without any reference to duty paid by the manufacturer. The respondents failed to provide evidence of requesting supplementary invoices showing the actual duty paid. Consequently, the Tribunal held that the excess credit was not admissible, setting aside the impugned order and upholding the demand. However, considering the circumstances, no penalty was imposed, and the appeals were allowed.

This detailed analysis of the judgment highlights the key issues, contentions of both parties, and the Tribunal's decision based on the specific facts and legal principles involved in the case of appeal against the dropping of proceedings for recovery of excess Cenvat credit.