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2012 (10) TMI 419 - AT - Central ExciseModvat credit denied - dealer only issuing invoices to the appellants without actually supplying the goods manufactured by them - Held that - Remand the matter to the original adjudicating authority, by accepting their stand that the credit cannot be disallowed in respect of all the transactions especially when the manufacturer as also dealer have deposed in their submissions that it is only sometimes that they were issuing invoices without actual supply of goods - in favour of assessee by way of remand.
Issues:
Denial of modvat credit based on invoices issued without actual supply of goods. Analysis: The judgment revolves around the denial of modvat credit amounting to Rs.1,92,298/- to the appellant, which they availed based on invoices from their dealers. The investigation revealed that the manufacturer was only issuing invoices without supplying the goods, as confirmed by statements from transporters and the dealer. The appellant contended that they had indeed received the goods from the dealers and were entitled to the credit, emphasizing the lack of evidence proving otherwise. The learned advocate argued that the denial of credit should be based on transactions where goods were not actually supplied, and they were willing to reverse the credit for such cases. It was highlighted that both the manufacturer and dealer acknowledged instances where goods were not sent with the invoices, indicating that the denial should be specific to those transactions. The advocate stressed the need for Revenue to verify such transactions before disallowing the credit in all cases. In the judgment, the presiding member set aside the impugned order and remanded the matter to the original adjudicating authority. The decision was based on accepting the appellant's stance that credit should not be disallowed for all transactions, especially when both the manufacturer and dealer admitted to issuing invoices without actual supply only in certain instances. The Revenue was directed to determine the inadmissible modvat credit by focusing on specific invoices where goods were not supplied, rather than a blanket denial for all transactions. Consequently, the appeal was allowed for remand, providing an opportunity for further investigation and clarification on the disputed modvat credit issue.
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