2005 (10) TMI 125 - AT - Central Excise

Summary

Issues:
1. Denial of Modvat credit to the applicants.
2. Failure to produce ST-XXVI forms as proof of receipt of inputs.
3. Lack of enquiry from suppliers of the inputs.
4. Basis of demand solely on Sales Tax forms.

Analysis:
1. The applicants filed for waiver of pre-deposit of duty and penalties after the denial of Modvat credit due to receiving only Modvatable documents, not the actual inputs. The Revenue argued that the applicants did not produce ST-XXVI forms, required for showing entry of goods into Himachal Pradesh, thus lacking proof of input receipt.

2. The applicants contended that they received goods from manufacturers and dealers, who maintained proper duty payment records. Despite no enquiries from suppliers, the Commissioner correlated inputs during adjudication, allowing credit for a certain quantity. The applicants argued that credit should not be denied as they used valid duty paying documents.

3. The Revenue emphasized that ST-XXVI forms from Sales Tax authorities were crucial to prove goods' entry into Himachal Pradesh, which the applicants failed to produce. Lack of evidence supporting their claim was a key point raised by the Revenue.

4. Notably, no enquiry was conducted from input suppliers regarding goods supply or price payment by the applicants. The demand was solely based on Sales Tax forms, provided to the adjudicating authority but not to the applicants. Considering the strong case presented by the applicants, the Tribunal waived the pre-deposit of duties and penalties for the appeal hearing, allowing the stay petitions.