2005 (11) TMI 285 - AT - Central Excise

Summary

Issues:
1. Confirmation of duty amount and penalty imposition against the respondent company for violation of Central Excise Rules.
2. Dispute regarding Modvat credit availed by the respondent company without submitting proper duty paying documents.
3. Commissioner (Appeals) setting aside the order passed by the lower authority leading to the Revenue's appeal.
4. Verification of receipt of capital goods in the factory and issuance of show cause notice based on circumstantial evidence.
5. Observations by Commissioner (Appeals) regarding the duty payment, utilization of goods, and admissibility of Modvat credit.

Issue 1:
The original adjudicating authority confirmed a duty amount of Rs. 4,63,026.00 against the respondent company for violating Rule 57G of the Central Excise Rules. An equivalent penalty was imposed. The Commissioner (Appeals) set aside this order, leading to the Revenue's appeal to the Tribunal.

Issue 2:
The respondent company availed Modvat credit of Rs. 4,63,026.00 without submitting the duplicate copy of the relevant invoice for defacement. The Commissioner (Appeals) observed that the company had not informed the Assistant Commissioner or obtained mandatory permission before taking the Modvat credit, leading to the dispute.

Issue 3:
The Revenue appealed against the Commissioner (Appeals) decision, arguing that the company failed to inform the jurisdictional Assistant Commissioner before availing the Modvat credit. However, the Tribunal found no substance in the Revenue's appeal and rejected it.

Issue 4:
The Tribunal noted that the Commissioner (Appeals) found no dispute regarding the receipt of capital goods in the factory by the respondent company. The Commissioner criticized the Department for issuing a show cause notice based on circumstantial evidence without proper verification, emphasizing the duty of the Department to verify facts before issuing notices.

Issue 5:
The Commissioner (Appeals) highlighted the verification of receipt of capital goods, duty payment, and utilization in the factory, which were undisputed. He also noted that the admissibility of Modvat credit against a lost duplicate invoice was covered by case law. The Tribunal agreed with the Commissioner's findings, stating that the Revenue failed to provide evidence contradicting the Commissioner's observations, leading to the rejection of the Revenue's appeal.

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