TMI Blog2011 (1) TMI 623X X X X Extracts X X X X X X X X Extracts X X X X ..... which the Cenvat credit cannot be denied when neither authenticity of the invoices issued by the Hazira factory of the ESL to the appellants is disputed nor the receipt of the goods covered under those invoices by the appellants is disputed - Decided in favor of the assessee Regarding interest and penalty - appellants would be liable for interest under Rule 12 of the Cenvat Credit Rules read with Section 11AB of the Central Excise Act, 1944 on the demand of Cenvat credit of Rs. 7,32,490 - since this credit has been wrongly taken, the appellants would be liable for penalty and accordingly, the order-in-original imposing penalty on this count is restored - Decided against the assessee - E/1294 1313/2005-EX(BR) - 92-93/2011-EX(PB) - Dated:- 21-1-2011 - Justice R.M.S. Khandeparkar, Shri Rakesh Kumar, JJ. REPRESENTED BY : Shri M.P. Devnath, Advocate, for the Assessee. Shri V. Chaudhary, DR, for the Department. [Order per : Rakesh Kumar, Member (T)]. The facts giving rise to these appeals are, in brief, as under :- 1.1 M/s. Essar Steels Ltd. (hereinafter referred to as ESL ) have a manufacturing unit at Hazira, Surat, for manufacture of various steel products i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant were showing the receipt of the goods from M/s. ESL, Hazira. Inquiry was made with Mr. Jogendra Singh, General Manager (Finance) of the appellant and has statement was recorded on 21-6-99 wherein he stated that ESL, Hazira had sent 77 H.R Coils in excess of their requirements but they refused to accept the same, that for this reason, ESL had to unload the materials in their depot at Ludhiana, from where it was subsequently lifted by them through M/s. National Goods Carrier and due to this reason only, in the RG-23A Part-I Register, the receipt of the materials had been shown from Surat and not from Ludhiana Depot. However, on enquiry, Shri J.S. Parmar, In charge of Depot of ESL at Ludhiana, in his statement dated 22-6-99 categorically denied having received the above 77 coils in their depot and also their subsequent clearance therefrom. 1.2 As the statements of Shri Jogendra Singh, General Manager (Finance) of the appellants and Shri J.S. Parmar, Officer In charge of the Sales Depot at Ludhiana of ESL were contradictory, inquiries were conducted with Shri Sukhinder Singh Mann, Proprietor of National Goods Carrier and Shri Mann in his statement dated 25-6-99 confirmed ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opies of the invoices issued by ESL while it is only the duplicate copy of the invoices which is valid document for availing Cenvat credit. As per the provisions of Rule 56G(6) of Central Excise Rules, 1944 credit could be taken on the basis of original copies of invoices if the duplicate copies of the invoices had been lost and the Asstt. Commissioner was satisfied about the loss of the duplicate copies. But in this regard, no such evidence is available on record to show that the appellant had satisfied the jurisdictional Asstt. Commissioner and no orders had been passed by the jurisdictional Asstt. Commissioner permitting the availment of cenvat credit on the basis of original copies of the invoices. 1.4 It is in view of the above facts that a show cause notice dated 1-12-2003 was issued to ESL (Sales Depot), Ludhiana, Hero Cycles, G.T. Road, Ludhiana (Appellant), M/s. National Goods Carrier, Ludhiana and M/s. Timco Steel Industries, Ludhiana for - (a) recovery of Cenvat credit amounting to Rs. 37,55,264/- under Rule 57-I(1) of Central Excise Rules, 1944 along with interest under Rule 57-I(5) of Central Excise Rules, 1944 from the appellant; (b) imposition of penalty on the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l submissions. (1) As regards the denial of Cenvat credit amounting to Rs. 30,22,774/- the same has been wrongly denied in view of the following :- (a) the appellants manufacture CR Coils and CR sheets for which the raw material is H.R. Coils which were purchased from various manufactures like ESL, SAIL, TISCO, etc. So far as purchase of H.R. Coils from ESL is concerned, the appellants received the goods - H.R. Coils at their factory gate directly from ESL, Hazira, Surat and at the same time also from their Depot at Ludhiana. The invoices issued by ESL mention various particulars like quantity, weight, vehicle no. etc. The security staff at the factory gate also verified whether the identication number of the coils given in the invoice tallied with the identification No. on the goods received. Thereafter the appellant received the goods after making entries in the Inward Register maintained at the factory gate and also entries in the RG-23A Part-I giving details of the quantity of HR Coils, invoice number, etc. The show cause notice alleges that since the goods have been received from the depot of ESL at Ludhiana depot, the cenvat credit would be admissible only if the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ales depot of ESL but mis-stated and suppressed the fact in the RG23A Part-I Register and showed the receipt from ESL s manufacturing plant at Hazira, with the sole purpose of evading payment of duty. When it is undisputed fact that when 77 HR Coils manufactured by ESL, Hazira had been dispatched by the Hazira Factory to Ludhiana under its invoices issued to the appellants, but the goods, instead of being directly unloaded at the appellant s factory, were first unloaded at ESL s depot at Ludhiana, from where the same were subsequently received by the appellants and when the appellants for this reason have taken Cenvat credit on the basis of the invoices issued by the Hazira factory of ESL and have also shown the receipt of the goods from Hazira factory of ESL, there is no justification for denying the Cenvat credit just on the ground that the movement of the goods from depot to the appellant s factory should have been under the invoice issued by the depot of the ESL at Ludhiana under Rule 57GG and the credit should have been taken only on the basis of those invoices. (e) A perusal of the provisions of Rule 57A read with Rule 57G of Central Excise Rules clearly establishes the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e copy cannot be a ground to deny credit to the appellants. It is not the case of the department that the appellants have availed credit both on the original as well as also on the duplicate copies of the invoice. (b) The appellants can execute an indemnity bond to the department stating that they will not take credit if a duplicate copy is found available with them. It is settled position in law that credit should not be denied on minor technicalities. (c) The issue is also settled by the Hon ble Punjab Haryana High Court in the case of Commissioner of Central Excise, Ludhiana v. Ralson India Ltd. reported in 2006 (202) E.L.T. 759 (P H) = 2008 (10) S.T.R. 505 (P H). (3) In this case, the show cause notice dated 1-12-2003 denying the Cenvat credit had been issued for the period from 21-11-98 to 30-11-98 by invoking the extended period under proviso to Section 11A(1) of the Central Excise Act, 1944. The longer period is not applicable to the Department as the Department was aware of the fact that the appellants have been availing credit on the basis of the manufacturer s invoices issued by ESL as well as ESL s depot at Ludhiana. The appellant had been filing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , during the relevant period, duplicate copy of the invoice was the specified document for taking modvat/cenvat credit. Rule 57G(6) lays down that the credit can be taken on the basis of original copy in case of loss of duplicate copy, provided the loss of duplicate copy was reported to the jurisdictional officer and necessary procedure was followed for taking credit on the basis of original copies. In this case, neither the loss of duplicate copy of the invoices was reported nor any such permission was obtained from the department. (4) It is well settled law that credit can be taken only on the basis of specified documents prescribed by law. In this regard, reliance is placed on the judgments of the Larger Bench of the Tribunal in the case of CCE, Delhi v. Avis Electronics Pvt. Ltd. reported in 2000 (117) E.L.T. 571 (Tri. -LB) and of the High Courts in the cases of Executive Engineer v. ACCE, Ujjain reported in 2008 (224) E.L.T. 219 (MP-HC) and S.K. Foils Ltd. v. CCE, Delhi-III reported in 2009 (239) E.L.T. 395 (P H HC). (5) In view of the above, the impugned order of the Commissioner (Appeals) upholding the Cenvat credit demand is correct. (6) As regards the penalty and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessary permission has been taken for taking Cenvat credit on the basis of the original copies of the invoices. In view of the settled legal position on this issue, we are of the view that the credit amounting to Rs. 7,32,490/- taken on the original copy of the invoice has been rightly denied and there is no infirmity in the impugned order of the Commissioner (Appeals) upholding the denial of credit and confirmation of its demand. 5. Coming to the denial of credit amounting to Rs. 30,22,774/- in respect of 77 H.R. Coils, we find that the Commissioner (Appeals) in page 3 of the impugned order-in-appeal has given a finding that in this case, the fact that the goods cleared by ESL, Hazira were at first unloaded in their depot premises situated at Ludhiana, from where the same were subsequently transported to the factory premises of the appellant is not in dispute. The Addl. Commissioner in para 24 of the order-in-original has also given a finding that though earlier the Ludhiana depot denied having received the consignments of 77 HR Coils despatched by their Hazira factory which had been consigned to M/s. Hero Cycles Limited (the appellant), subsequently, they admitted the fact of h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in 2004 (168) E.L.T. 466 (Tribunal-LB). However, this judgment of the Tribunal is no longer a good law as the same, on a reference appeal having been filed by the Department, has been set aside and reversed by the Punjab Haryana High Court vide judgment reported in 2006 (202) E.L.T. 398 (P H) = 2006 (4) S.T.R. 177 (P H). In view of this, the appellants would be liable for interest under Rule 12 of the Cenvat Credit Rules read with Section 11AB of the Central Excise Act, 1944 on the demand of Cenvat credit of Rs. 7,32,490/-. Similarly, since this credit has been wrongly taken, the appellants would be liable for penalty and accordingly, the order-in-original imposing penalty on this count is restored. However, looking to the quantum of Cenvat credit demand, which has been upheld, the quantum of penalty is to be reduced. 7. In view of the above findings while the impugned order upholding the Cenvat credit of Rs. 30,22,774/- is set aside, the part of the order upholding the Cenvat credit of Rs. 7,32,490/- is upheld. As discussed above, the impugned order setting aside the interest and penalty on the ground that the entire disputed amount of Cenvat credit had been paid prior ..... X X X X Extracts X X X X X X X X Extracts X X X X
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