2013 (10) TMI 331 - AT - Central Excise

CENVAT Credit Waiver of Pre-deposit duty paying documents - Held that - The allegation against the appellant unit located at Manesar, Gurgaon is that they have availed Cenvat Credit on the basis of invoices which mentioned the consignees address as the address of the Naharpur Unit - out of seven machines covered by the invoices, five machines were found installed in Naharpur Unit and there is no evidence produced that the same have been returned back to Manesar Unit which had taken the Cenvat Credit - There is no verification done to ascertain that the Naharpur Unit has not taken Cenvat Credit on the basis of the same invoices - In view of this, this is not the case of total waiver - Partial Stay gratned.

Summary

Issues: Allegation of wrongful Cenvat Credit availed by the appellant unit based on invoices with incorrect consignee address.

Analysis:
The appellant company, with two manufacturing units in Gurgaon, faced allegations of availing Cenvat Credit amounting to Rs. 6,74,582/- based on invoices with the consignee address of the second unit instead of the actual unit where the machinery was installed. The Joint Commissioner confirmed the demand, interest, and penalty after verification revealed that only two out of seven machines covered by the invoices were installed in the intended factory. The Commissioner (Appeals) upheld this decision. The appellant argued that the machinery transferred to the other unit was on a return basis, and the goods covered by the invoices were eventually received back at the Manesar unit. The appellant requested a waiver of the pre-deposit for the appeal.

The appellant's counsel contended that despite the consignee address discrepancy, the machinery was installed at the correct unit, and the transferred machinery was returned. However, the Joint Commissioner's findings indicated that five out of seven machines were at the Naharpur unit, with no evidence of their return to the Manesar unit. The stay application was opposed, emphasizing the lack of evidence regarding the use of dies and inputs in the Manesar unit and the absence of verification showing the return of machinery to the correct unit. The Tribunal considered both arguments and examined the records.

The Tribunal found that five machines covered by the invoices were indeed at the Naharpur unit, with no proof of their return to the Manesar unit. Additionally, there was no verification to confirm that the Naharpur unit did not claim Cenvat Credit based on the same invoices. Consequently, the Tribunal directed the appellant to deposit Rs. 1,00,000/- within four weeks, with further compliance due by a specified date. Upon this deposit, the pre-deposit requirement for the remaining Cenvat Credit demand, interest, and penalty would be waived for the appeal's hearing, and recovery would be stayed.