2009 (10) TMI 371 - AT - Central Excise

Cenvat Credit- The dispute relates to admissibility of credit of duty paid on inputs which has been denied on different grounds. Canvas canopy- the appellant submits as the value of canopy stands included in the assessable value of chases thus allow the credit. Held that- Credit availed is in order thus demand on this ground set aside. Castable Refractory- the Castable Refractory is used for lining of furnace which gets consumed while melting during the process of manufacture of castings. Held that- the demand in this regard is set aside. Ramming farmer- Ramming Farmers is claimed to be MS steel structure which is put inside furnace for holding and ramming the lining refractories in shape. Held that- the credit is also admissible and the order in this regard is set aside. Vendor under Investigation- Commissioner has denied the credit but allowed the Assistant Commissioner to conduct verification as to the genuineness of the documents and duty paid nature of the consignments sent by Clutch Auto Ltd. and allow the credit if the same is found to be in order. Held that- The demand in this regard is set aside. The order of the Commissioner in so far as the direction to the jurisdictional Central Excise authorities to verify the genuineness of the documents and duty paid nature and recover the credit if the same was found to be not in order is upheld and it is open to the authorities to deny the credit as per law if found inadmissible. Invalid duty paying documents- Held that- Since the broad description of the inputs have been given and the Tariff description is also given and there is no dispute about the receipt and duty paid nature of the input the denial of the credit is not justified. Demand in this regard is set aside. stage of dealership and certificate of dealer not provided- the invoices did not indicate as to whether they are first stage dealer or second stage dealer. On this ground the credit has been denied. Held that- the demand in this regard is not sustainable and is set aside. Duty paying particulars not mentioned- held that-credit should not be denied.

Issues:
1. Admissibility of credit of duty paid on inputs.
2. Canvas Canopy credit.
3. Castable Refractory credit.
4. Ramming Farmers credit.
5. Credit from vendor under investigation.
6. Invalid duty paying documents credit.
7. Stage of dealership and certificate of dealer not provided credit.
8. Duty paying particulars not mentioned credit.
9. Penalty imposition under Rule 173Q.

Admissibility of credit of duty paid on inputs:
The dispute in this case revolves around the admissibility of credit of duty paid on inputs. The appellant categorized the issue-wise demands and conceded certain demands. The Tribunal heard both parties and examined the records to make decisions on each category of disputed items.

Canvas Canopy credit:
The appellant claimed that the Canvas Canopy is part of the motor vehicle-chassis and is included in the assessable value for duty payment. The Tribunal found that the Canvas Canopy is indeed part of the chassis and the duty paid is justified. Therefore, the demand on this ground was set aside.

Castable Refractory credit:
Regarding the Castable Refractory, used for lining furnaces during the manufacturing process, the appellant argued it is a consumable input. The Tribunal agreed that such lining material qualifies as an input, making the credit admissible, and thus set aside the demand.

Ramming Farmers credit:
The Ramming Farmers, claimed to be a steel structure used in furnaces, was also deemed admissible for credit similar to the refractory material. The Tribunal set aside the order denying credit for this item.

Credit from vendor under investigation:
The appellant sought credit for duty paid on inputs from a vendor under investigation. The Commissioner had directed verification of the documents and duty paid nature of consignments. The Tribunal set aside the recovery order pending verification but upheld the direction for verification by Central Excise authorities.

Invalid duty paying documents credit:
In cases where invoices lacked detailed descriptions of inputs, the Tribunal noted the broad descriptions provided along with Tariff Sub-Heading and part numbers were sufficient. As there was no dispute about the receipt and duty paid nature of the inputs, the denial of credit was deemed unjustified, and the demand was set aside.

Stage of dealership and certificate of dealer not provided credit:
Issues arose when invoices from dealers did not specify whether they were first or second stage dealers. The Tribunal ruled that as the dealers were registered and supplied goods with invoices, the absence of dealer status indication does not affect credit availability, setting aside the demand.

Duty paying particulars not mentioned credit:
Regarding invoices lacking specific debit entry details, the Tribunal considered changes in procedures and opined that the omission should not result in credit denial. Therefore, the demand on this ground was also set aside.

Penalty imposition under Rule 173Q:
The Tribunal found no justification for imposing a penalty of Rs.10.00 lakhs, as the appellant had received materials under various invoices, and the credit denial was due to interpretational differences, not an intention to evade duty. Consequently, the penalty was set aside.

In conclusion, the Tribunal disposed of the appeals, allowing credits for various items while setting aside demands on multiple grounds. The penalty imposed under Rule 173Q was also revoked due to the lack of intent to evade duty.

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