2019 (4) TMI 18 - AT - Central Excise

CENVAT Credit - denial on the ground that both description and quantities mentioned did not matched in the invoice and the CENVAT credit Account - Held that - If appellants produced such documents establishing actual charging of these goods or their utilization in the process of production, the credit should not have been denied. Admittedly such documents were either not produced or considered/verified by the Original Adjudicating Authority. Thus the matter needs to go back to them for de-novo verification of such documents which appellant will produce for establishing actual utilization of the said goods. The matter remanded to Original Adjudicating Authority for De-novo consideration - appeal allowed by way of remand.

Summary

Issues:
Disallowed Cenvat Credit for Alumina Hydrate due to mismatch in description and quantities in invoices.

Analysis:
The appellants filed appeals against two orders disallowing Cenvat Credit for Alumina Hydrate due to discrepancies in description and quantities. The ground for denial was that the goods mentioned in the invoices as Alumina Hydrate were recorded as Calcined Alumina, with a mismatch in quantities. Two show cause notices were issued, and after considering submissions, the matter was adjudicated.

The advocate for the appellants argued that they had indeed received Alumina Hydrate, supported by documents like invoices, transportation records, and weighment slips. The Jurisdictional Range Officer's verification report confirmed the receipt of goods until weighment. The Revenue did not allege diversion of goods or clandestine receipt of Calcined Alumina. The appellants used Alumina Hydrate in their manufacturing process and sought credit for it.

On the Revenue's side, it was emphasized that verification of records regarding receipt and utilization of Alumina Hydrate was crucial. If the appellants could demonstrate actual receipt and utilization through records, Cenvat Credit could be allowed, subject to proper verification.

The Tribunal considered the arguments and noted a Chartered Engineers Certificate detailing the process from Bauxite to Calcined Alumina to Alumina, where Hydrated Alumina was used as seed material. The production documents or records showing the inputs for output goods were deemed essential for verification.

Ultimately, the Tribunal ruled in favor of the appellants, remanding the matter to the Original Adjudicating Authority for a de-novo verification of documents that the appellants would produce to establish the actual utilization of the goods. The Authority was directed to decide the issue within four months of receiving the order, considering the age of the matter.