2014 (2) TMI 246 - AT - Central Excise

Waiver of pre deposit - Demand of service tax - Denial of CENVAT Credit - Violation of principal of nautal justice - endorsed Bills of Entry. - Held that - The impugned order was passed by the learned Commissioner apparently after giving the party a reasonable opportunity of being personally heard. The party did not turn up on most of the occasions. When they turned up through their Cost Accountant on 23.5.2011, they wanted to produce documents like transport documents in proof of receipt of inputs, for which the required time was given by the adjudicating authority. The Cost Accountant undertook to produce such documents by 25.5.2011 but did not produce the documents. The learned Commissioner noted this fact and was constrained to pass the impugned order on 30.5.2011. In this scenario, the plea of violation of natural justice raised before us by the learned consultant is untenable. One of the documents prescribed thereunder for the purpose of availment of CENVAT credit is an invoice issued by the importer of inputs/capital goods. In the present case, the appellant has not shown any such invoice having been issued by any of the so-called principal manufacturers under Rule-9 to enable the appellant to take CENVAT credit of CVD paid on the goods. It is for the adjudicating authority to consider this factual aspect also - This is a case fit for remand for de novo adjudication. Accordingly, the impugned order is set aside and this appeal is allowed by way of remand with a request to the Commissioner for taking up the case for de novo adjudication in accordance with law after giving the party a reasonable opportunity of adducing evidence and of being personally heard - Decided in favour of assessee.

Summary

Issues:
Denial of CENVAT credit and connected penalty imposition.

Analysis:
The appellant filed an application seeking waiver and stay against the demand of Rs. 64,03,424/- for denied CENVAT credit and a penalty of Rs. 2,00,000/-. The appeal was taken up after dispensing with predeposit. The denial of CENVAT credit was primarily for the period from May to November 2009, where the appellant claimed credit based on Bills of Entry and invoices not addressed to them but endorsed by the principal manufacturers. The appellant argued that they received and used the inputs for manufacturing medicaments, and the duty-paid character of the inputs was not disputed. The appellant cited relevant case law to support their claim. The department contended that the plea of endorsement was not raised before the adjudicating authority and should not be considered at the appellate stage as it was a factual plea.

Upon careful consideration, the Tribunal noted that the appellant failed to produce necessary documents despite undertaking to do so within a specified timeframe. The plea of violation of natural justice was deemed untenable. However, the Tribunal considered the plea of endorsement, as copies of Bills of Entry bearing endorsements by principal manufacturers were presented. The appellant's argument was based on the entitlement to CENVAT credit due to the endorsed Bills of Entry. The Tribunal also noted that factual details and relevant case law were not presented before the adjudicating authority. Rule-9 of the CENVAT Credit Rules 2004 was referenced, highlighting the requirement of an invoice issued by the importer for availing CENVAT credit, which was not shown by the appellant.

In light of the facts and circumstances, the Tribunal found the case suitable for remand for de novo adjudication. The impugned order was set aside, and the appeal was allowed for remand with instructions for the Commissioner to conduct a fresh adjudication, providing the appellant with a reasonable opportunity to present evidence and be heard. The appellant's consultant agreed to cooperate and not seek adjournments. The stay application was also disposed of.