2018 (1) TMI 294 - AT - Central Excise

CENVAT credit - duty paying documents - documents self created by the respondent or otherwise - Held that - the department has not disputed receipt of quantity of returned finished goods, and it s accounting for the quantity in a separate part of Daily Stock account Register - the adjudicating authorities findings regarding non-returning of original invoices in case of return of goods and cenvat credit availed is irregular, is not correct - the First Appellate Authority has taken plausible view on the issue within the framework of the provisions of Rule 9 of the CCR, 2004 and Rule 16 of CER, 2002. Appeal dismissed - decided against Revenue.

Summary

Issues involved:
Availment of Cenvat Credit on self-created documents by the respondent, disagreement between Revenue and First Appellate Authority on the issue, consideration of Rule 9 of the CCR 2004 and Rule 16 of CER 2002 in the judgment.

Analysis:

1. Availment of Cenvat Credit on self-created documents:
The case involved a dispute regarding the respondent availing Cenvat Credit on self-created documents. The respondent, a manufacturer of excisable goods, had taken Cenvat Credit on inputs and input services. The Revenue objected during an audit, leading to demands, interest, and penalties imposed by the Adjudicating Authority. The First Appellate Authority set aside these demands, leading to the Revenue filing appeals. The Revenue argued that the respondent failed to produce original or duplicate invoices, and the documents relied upon were not produced before the lower authorities. The Revenue contended that the Cenvat Credit was availed based on improper documents, contravening the Rules.

2. Disagreement between Revenue and First Appellate Authority:
The Revenue contested the findings of the First Appellate Authority, claiming that the Authority did not consider the factual matrix adequately. The Revenue argued that necessary documents were not produced, and the objections were based on circumstantial evidence. The Revenue highlighted the delay in document submission and alleged malafide intentions of the assessee. The First Appellate Authority, however, considered all objections raised by the Revenue and analyzed the provisions of Rule 9 of the CCR 2004. The Authority found that the appellant had maintained separate records for returned finished goods, allowing the Cenvat Credit based on valid documents.

3. Consideration of Rule 9 of the CCR 2004 and Rule 16 of CER 2002:
The First Appellate Authority's decision was based on a detailed analysis of Rule 9 of the CCR 2004 and Rule 16 of CER 2002. The Authority noted that none of the prescribed documents under Rule 9 addressed the situation of taking credit on finished goods returned to the manufacturer. The appellant's eligibility for Cenvat Credit was upheld based on valid documents, proper accounting of returned goods, and intimation to the range superintendent. The Authority found no dispute regarding the receipt of returned goods and deemed the imposition of penalties as unjustified.

In conclusion, the judgment upheld the decision of the First Appellate Authority, emphasizing the proper maintenance of records by the appellant and compliance with the relevant rules. The judgment rejected the appeals filed by the Revenue and disposed of the cross objections, affirming the legality and correctness of the impugned order.