2018 (4) TMI 470 - AT - Central Excise

CENVAT credit - Petroleum Coke, substitute for coal as fuel - duty paying invoices - Held that - the petcoke was sold/cleared to the assessee in this case that the address has been clearly indicated on the documents. That the route of Coastal Cargo Movement by ship was reverted to reduce the cost of transportation of petcoke - the assessee has produced a Chartered Account Certificate indicating purchases of petcoke during the period in question of certify transported from Chennai Port to their various factories. Once the receipt and use of inputs are proved, the documents get relegated to the second place. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Challenging Order-in-Original No.27/2007-C.EX dated 31.12.2007 - Cenvat Credit on Petroleum Coke - Penalty imposition under Cenvat Credit Rules 2004.

Detailed Analysis:

1. Assessee's Appeal:
The appellant, M/s Madras Cement Ltd., contested the penalty imposed under the Cenvat Credit Rules 2004. The Tribunal found the penalty imposition unjustified as the demand initiated by the Show Cause Notice was dropped due to factual findings in favor of the appellant. The Tribunal noted the absence of reasoning by the Adjudicating Authority for imposing the penalty, leading to the unsustainability of the penalty of ?30 lakh. Consequently, the appeal of the assessee was allowed, and the Impugned Order was set aside.

2. Revenue's Appeal:
The revenue challenged the findings regarding the clearance and transportation of inputs, specifically petcoke, from the manufacturer's premises to various locations. The Adjudicating Authority accepted the difficulty in identifying goods due to the transportation process but still allowed the credit. The revenue argued that there was no clear link to establish that the petcoke cleared by the supplier was received under the invoices on which credit was availed. However, upon review of documents including invoices, coastal cargo manifest, and a Chartered Account Certificate, the Tribunal found that the goods were indeed sold to the assessee, and the transportation route was altered to reduce costs. The Adjudicating Authority's findings were supported by detailed documentation indicating the receipt and utilization of goods, leading to the conclusion that the revenue appeal lacked merit and was rejected.

3. Operative Part of the Order:
The Tribunal pronounced the operative part of the order after hearing both sides, allowing the assessee's appeal and rejecting the revenue's appeal. The decision was based on a thorough examination of factual findings, documentation, and compliance with relevant rules and regulations. The judgment emphasized the importance of proper documentation and compliance while considering the imposition of penalties under the Cenvat Credit Rules 2004.