2008 (8) TMI 305 - AT - Central Excise

Cenvat Credit on the basis of original documents and not on the buyer s copy - It is not in dispute that the said goods are received under invoices of dealers as well as manufacturers - The goods were received and consumed in the factory premises of the appellant - hence the credit needs to be allowed

Summary

Issues:
Appeal against denial of credit on specific invoices - Original adjudicating authority's decision upheld - Evidence produced for some invoices, not for others - Cenvat/Modvat credit eligibility - Penalty imposed under Central Excise Rules - Reduction of penalty by Commissioner (Appeals) - Consideration of confusion during relevant period.

Analysis:
The appeal challenged the denial of credit on various invoices by the original adjudicating authority, a decision upheld by the Commissioner (Appeals). The appellant produced evidence for certain invoices but failed to do so for others. Notably, the Tribunal examined the details of specific invoices, highlighting that the appellant provided original invoices for certain transactions, indicating goods dispatch and duty discharge. The Tribunal emphasized that during the relevant period, Modvat/Cenvat credit was allowed on invoices from both dealers and manufacturers, and as the goods were received and consumed by the appellant, credit for specific invoices was deemed eligible.

Regarding the invoices lacking supporting evidence, the Tribunal upheld the denial of Cenvat credits for those specific amounts. The Tribunal specifically mentioned the amounts against invoices from Cenlab Ind. Ltd., Universal Oil-Seals Mfg. Co. Pvt. Ltd., B.E., and Spare Age Auto Ltd. The decision differentiated between invoices where evidence was provided and those where it was lacking, resulting in a partial allowance of credit based on the evidence presented.

In terms of penalties, the adjudicating authority had imposed a penalty on the appellant under Rule 173Q(1)(bbb) of the Central Excise Rules, 1944. However, the Commissioner (Appeals) reduced the penalty to Rs. 5000. The Tribunal considered the nascent stage of Cenvat/Modvat credit during the relevant period, acknowledging the confusion prevailing in the trade. Consequently, the Tribunal decided to set aside the penalty imposed on the appellant, emphasizing the need for a sympathetic approach due to the circumstances surrounding the credit availing process.

In conclusion, the Tribunal allowed the Cenvat/Modvat credit for specific invoices where evidence was provided, set aside the penalty imposed on the appellant, and disposed of the appeal accordingly, considering the eligibility of credit and the mitigating factors related to the confusion prevalent in the trade during the relevant period.