2014 (8) TMI 83 - AT - Central Excise

Cenvat credit - Clandestine removal - shortages of the finished stock were detected - Wrongful availement of - excess credit inasmuch as the verification of the truck no. mentioned in the Cenvatable invoice revealed that there were no such truck numbers and same belonged to some Vikram taxi vehicles. - Held that - Except the inquiry from the RTO that vehicles numbers were belonging to some three wheelers who were capable of only transporting 21 Kgs. material and it is possible that number of such vehicles were used for transportation of the material. As such, he accepted the assessees stand that merely because the vehicles numbers were of commercial transport, the said fact alone cannot lead to denial of credit without their being any other evidence. - Decided against the revenue. Regarding shortage of goods - Held that - As per the appellants, they have not disputed the short found goods, which can be on account of number of factors and have admitted their duty liability and have reversed the same from their Cenvat credit account, during the course of investigation. - inasmuch as there is no evidence that said shortages are on account of any clandestine removal, imposition of penalty was not justified. - Decided against the revenue.

Summary

Issues:
1. Appeal against confirmation of demand of duty and penalty.
2. Appeal regarding rejection of Cenvat credit.
3. Appeal against penalty imposition.
4. Appeal for refund of duty amount.

Analysis:
1. The judgment addresses two connected appeals filed by the Revenue. The first appeal challenges the order confirming duty demand of Rs. 2,69,975 along with a penalty, while the second appeal contests the rejection of Cenvat credit and penalty imposition. The Commissioner (Appeals) set aside the penalty on shortages but upheld the duty demand. The Tribunal found that the appellants admitted shortages and paid the duty, but the rejection of Cenvat credit lacked substantial evidence beyond a report from the RTO. The Tribunal referenced a case law to support the decision, ultimately rejecting the Revenue's appeal.

2. The second part of the judgment concerns the dropping of penalty on the appellant for shortages in finished stock. The Tribunal noted that while the appellant accepted the shortages and paid the duty, there was no evidence of clandestine removal to justify penalty imposition. Citing another case law, the Tribunal upheld the Commissioner (Appeals)'s decision to set aside the penalty due to the lack of evidence supporting evasion of duty. The Tribunal endorsed this decision and rejected the Revenue's appeal against penalty imposition.

3. The judgment also addresses the second appeal related to the refund of duty amount deposited during the investigation. As the first appeal by the Revenue was rejected, the appellant was entitled to a refund. Consequently, the Tribunal rejected the second appeal for refund, aligning with the outcome of the first appeal. Both appeals were disposed of accordingly, with the Tribunal upholding the decisions regarding duty demand, penalty imposition, and refund entitlement based on the evidence and legal precedents cited during the proceedings.