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2018 (5) TMI 1053 - AT - Central ExciseCENVAT credit - duty paying documents - moisture loss of 1302 MT iron ore pellets - Held that - there is nothing to indicate that the appellant had short-received 1302 MTs of iron ore during the period nor there is any allegation in the show cause notice indicating the appellant has to show cause for they received 1302 MTs of iron ore or not - appellant indicated that they had received entire quantity of iron ore pellets as indicated in the duty paying documents - credit cannot be denied - appeal allowed - decided in favor of appellant.
Issues:
Denial of CENVAT credit on iron ore pellets due to alleged non-receipt from supplier. Analysis: The appeal was made against an Order-in-Original denying CENVAT credit on 1302 MT iron ore pellets not received from the supplier. The show cause notice highlighted the denial of credit and the duty liability paid on provisional invoices. The adjudicating authority confirmed the demand for inadmissible credit based on the alleged non-receipt of inputs in the factory premises. However, upon review, it was found that there was no evidence of short-receipt of the iron ore pellets by the appellant. The appellant contested the alleged shortage in their reply to the show cause notice, stating they had received the entire quantity as per the duty paying documents. Upon examining the records and the order-in-original, it was observed that there was no indication of the appellant receiving a short quantity of iron ore pellets. The adjudicating authority's findings did not specify when or how the shortage occurred. Although the authority mentioned the appellant admitting to the short-receipt in their reply, a closer look at the reply revealed that the appellant disputed the alleged shortage and affirmed receiving the full quantity as per the documents. Considering the lack of evidence supporting the alleged non-receipt of 1302 MTs of iron ore pellets by the appellant, the impugned order denying the credit of &8377; 3,28,220 was deemed incorrect. Consequently, the order was set aside, and as the demand was annulled, the question of interest and penalty did not arise. The appeal was allowed on the challenged grounds, and the cross-objection filed by the Revenue was also disposed of accordingly.
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