2010 (4) TMI 583 - AT - Central Excise

Denial of credit (i) Credit of Rs. 41,47,609 disallowed on the ground that the same has been availed without any invoice or credit has been availed on the copy of invoice which is not duplicate copy of in voice. Held that in respect of denial of credit of Rs. 41,47,609.00, the matter is remanded to the adjudicating authority for de nova consideration - (ii) The appellants are also challenging the denial of credit of Rs. 61,22,262.00 which was denied on the ground that credit was availed on the strength of certificate issued by the Superintendent of Central Excise which is not valid duty paying document. In respect of denial of credit of Rs. 61,22,262.00/-, we find that, Tribunal in the case of S.A.I.L. 2010 -TMI - 78422 - CESTAT, KOLKATA relied upon by the appellant allowed credit of differential amount on the strength of certificate issued by the jurisdictional superintendent of the Central Excise. In view of the above decision, denial of credit is not sustainable - (iii) The appellant also challenging the demand of Rs. 1,11,35,767.00 which was in respect of the inputs on which credit has been availed were cleared as such after reversing credit - The case of the Revenue is that as per the Provisions of Rule 57AB (b) the reversal of credit in respect of the inputs cleared is not sufficient and the appellants are liable to pay the duty on inputs of capital goods by treating the same as manufactured goods. - The reversal of credit availed at the time of receipt of inputs is sufficient at the time of clearance of inputs as such from the factory of production hence the demand is not sustainable

Summary

Issues:
Appeal against denial of credit of Rs. 2.57 crores - Challenge to denial of specific credits - Interpretation of Central Excise Rules - Verification of invoices - Reversal of credit on cleared inputs - Duty payment on manufactured goods - Validity of certificates for duty payment - Applicability of previous tribunal decisions - Provisions of Rule 57AB(b) - Consideration of penalty imposition.

Analysis:

1. Denial of Credit of Rs. 41,47,609:
The appellant contested the denial of credit based on the submission of invoices under a letter to the jurisdictional superintendent. The adjudicating authority denied credit due to the absence of the letter copy. However, as the reference to the letter was made in the show cause notice, the denial was deemed unsustainable. The photocopies of invoices were also produced, which were considered valid as there was no requirement for defacement during that period. The matter was remanded for reconsideration.

2. Denial of Credit of Rs. 61,22,262:
The appellant availed credit based on a certificate for the differential duty paid by the manufacturer of inputs. The Tribunal's precedent supported this practice, leading to the setting aside of the denial and allowance of the appeal.

3. Demand of Rs. 1,11,35,767:
The Revenue relied on Rule 57AB(b) of the Central Excise Rules, requiring reversal of credit on cleared inputs. The appellant argued that the rule was similar to previous interpretations by the Tribunal, where the reversal of credit sufficed when inputs were cleared as such. As the rule lacked a proviso present in previous rules, the demand was deemed unsustainable, and the appeal was allowed.

4. Penalty Imposition:
Regarding the penalty, the matter was remanded for reconsideration along with the credit denial of Rs. 41,47,609. A penalty of Rs. 5.00 Lakhs was imposed for the uncontested demand of Rs. 43.17 Lakhs, meeting the ends of justice.

This comprehensive analysis of the judgment highlights the key issues, legal interpretations, arguments presented, and the final decisions made by the Appellate Tribunal CESTAT, KOLKATA in the cited case.