2001 (12) TMI 144 - AT - Central Excise

Summary

Issues:
1. Disallowance of Modvat credit based on original invoice
2. Disallowance of Modvat credit due to delay in availing credit
3. Imposition of personal penalty on the appellant-company

Issue 1: Disallowance of Modvat credit based on original invoice:
In Appeal No. E-535/2000, the Modvat credit of Rs. 12,375 was disallowed as it was taken based on the original copy of the invoice without satisfying the Assistant Commissioner about the loss of the duplicate copy in transit. The Assistant Commissioner refused permission for the credit due to a delay in application, leading to the denial of the credit. Following the decision in C.C.Ex., Meerut v. Modi Rubber Ltd., the denial of Modvat credit was upheld, but the personal penalty of Rs. 3,000 imposed on the appellant-company was set aside.

Issue 2: Disallowance of Modvat credit due to delay in availing credit:
In Appeal No. E-536/2000, the Modvat credit was disallowed amounting to Rs. 1,64,801, as it was taken based on the original invoice, with some credits availed after six months from the issuance of the inputs. The Assistant Commissioner did not doubt the loss of the duplicate copy but contended that the loss occurred in the factory, not in transit, thus not falling under Rule 57G(2A). The appellant argued that the loss in the factory should be considered as loss in transit, citing a Tribunal's decision in Bharat Roll Indus. Pvt. Ltd. The delay in availing credit after six months was attributed to the Revenue's prolonged decision-making process, seeking leniency for the appellant-company.

Issue 3: Imposition of personal penalty on the appellant-company:
The Tribunal found discrepancies in the factual position of the case, differing from the decision in Kusum Ingots, which prohibits credit availing within six months of a show cause notice. As the applications for credit were made within six months, the delay in granting permission should not be a basis for denying the benefit to the appellants. Consequently, the impugned order was set aside, and the matter was remanded to the Assistant Commissioner for fresh adjudication based on the observations made, allowing the appeal by way of remand.