2008 (10) TMI 155 - AT - Central Excise

Rule 57T(8) of the CER, 1944 permitted credit on attested photocopies of B/E if the Assistant Collector is satisfied that the duplicate copy of invoice or triplicate copy of B/E have been lost in transit but Appellant did not intimate the Assistant Commissioner about the loss of the documents however, denial of huge credit mere for procedural lapse, is not justified credit allowed but appellant should be penalized for his lapse contention of appellant that Guide should be considered for capital goods credit as a part of the Coke Oven Battery is without any merit appeal partly allowed

Summary

Issues involved:
1. Denial of credit amounting to Rs. 1,24,55,573/- and Rs. 45,86,664/- along with the imposition of a penalty.
2. Denial of credit in respect of attested photocopy of bill of entry and Guide Cars.

Detailed Analysis:
Issue 1:
The Appellant challenged the denial of credit amounting to Rs. 1,24,55,573/- and Rs. 45,86,664/- along with a penalty of Rs. 5,00,000/-. The denial of credit was based on two counts, one being the attested photocopy of the bill of entry and the other being the Guide Cars. The Appellant argued that the duty paid nature of the goods was not in doubt, and they had followed the necessary procedures. The Appellant cited relevant case laws to support their claim. The Tribunal noted that there was a lapse on the part of the Appellant for not following the prescribed procedure of intimating the Assistant Commissioner about the loss of documents for availing Modvat credit. However, considering the totality of the circumstances, the Tribunal held that the duty credit based on the attested photocopy of the bill of entry was admissible. The Tribunal set aside the demand for Rs. 1,24,55,573/- but imposed a penalty of Rs. 1,00,000/- for the lapse in following the prescribed procedure.

Issue 2:
Regarding the denial of credit in respect of Guide Cars, the Appellant argued that the goods were received under specific invoices classifying them under a particular sub-heading. The Appellant contended that the Department was incorrect in holding that the goods were classifiable under a different heading. The Appellant also argued that even if the Guide Car was classifiable under a different heading, it should still be eligible for credit as part of the capital goods. The Tribunal considered the arguments from both sides and noted that the goods had been re-classified at the supplier's end, and under the Cenvat scheme, if the assessment varied at the supplier's end, the credit needed to be varied at the recipient's end. The Tribunal held that the goods classified under a different heading at the supplier's end were not eligible for capital goods credit. The Tribunal also rejected the argument that the Guide Car could be considered part of the Coke Oven Battery. Consequently, the Tribunal upheld the demand of Rs. 45,86,664/- but decided not to impose a penalty considering the disputed nature of the issue.

In conclusion, the Tribunal partly allowed the appeal by setting aside one demand, reducing the penalty, and upholding the other demand based on the detailed analysis and interpretation of relevant legal provisions and case laws.