2015 (10) TMI 1671 - AT - Central Excise

Denial of CENVAT Credit - Utilization on the basis of Xerox copy of invoices - Held that - in the absence of any dispute or doubt about the receipt, consumption and proper utilization of the inputs in the appellants factory, the credit cannot be denied to them merely on the ground of technicality. Accordingly, I set aside the impugned order - Decided in favour of assessee.

Summary

Issues:
Denial of Cenvat credit based on photocopies of Bills of Entry for imported goods; Rejection of certificate from Deputy Commissioner of Customs as a photocopy; Failure to consider proper utilization of inputs in the factory.

Analysis:
The appellants were denied Cenvat credit amounting to Rs. 20,46,576/- due to availing it based on photocopies of Bills of Entry for imported Lead Alloys, as the original invoices were lost and an FIR was lodged. The appellants asserted that they were the importers, cleared the goods with duty payment, and used the inputs in manufacturing excisable goods, duly recorded in their registers. The Tribunal found the denial of credit solely on the photocopy basis unjustified, given the absence of doubt regarding duty payment and utilization of inputs in cleared products.

During adjudication, the appellants presented a certificate from the Deputy Commissioner of Customs confirming duty payment on the imported goods, which the lower authority dismissed merely because it was a photocopy. The Tribunal criticized this approach, emphasizing that when a Customs officer certifies duty payment, rejecting it based on being a photocopy is unwarranted. The adjudicating authority's failure to consider the certificate or verify its accuracy was deemed unjust, as they could have cross-checked with the Customs office or requested the original certificate from the appellants.

Agreeing with the appellants, the Tribunal emphasized that denying credit based on technicalities when there is no dispute about input receipt, consumption, and utilization in the factory is improper. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief. The Tribunal highlighted the importance of considering the actual utilization of inputs rather than dismissing claims based solely on technical grounds, ensuring fairness in Cenvat credit entitlements.