2005 (10) TMI 477 - AT - Central Excise

Tribunal overturns denial of credit, emphasizes record-keeping compliance with circular guidelines.

The Tribunal allowed the appeal, finding the denial of deemed credit unjustified due to the appellant's meticulous record-keeping and compliance with ... Cenvat/Modvat - Deemed credit Issues:Appeal against OIA No. 217/2001 - Deemed credit denial - Govt. Circular No. 332/30/87-TRU - Verification of invoices - Appellant's meticulous record-keeping - Departmental audit findings - Invocation of longer period justification.Analysis:The case involved an appeal against OIA No. 217/2001, where deemed credit was denied to the appellant regarding ingots and re-rollable materials of iron or steel purchased outside. The appellant cited Govt. Circular No. 332/30/87-TRU, dated 20-10-1987, which allowed deemed credit without the need for verifying invoices thoroughly. The appellant argued that the denial of deemed credit was based on the absence of seller addresses on the invoices, making it challenging for the authorities to verify the information. However, the appellant maintained meticulous records of cash purchase bills, store receipts, and RG 23 accounts, which were presented to the Tribunal. The appellant emphasized that no fabrication of documents was alleged by the Revenue, and a departmental audit conducted did not reveal any irregularities during the disputed period from December 1987 to February 1988.The Tribunal examined the relevant provisions of the Govt. circular, which stated that deemed credit for purchased materials should be allowed without the production of duty payment documents. The Tribunal noted that detailed verification of re-rollable materials purchased was not required under the circular. The absence of full seller addresses should not be a reason to deny deemed credit, especially when the appellant maintained meticulous records and no fabrication was alleged. Additionally, the departmental audit did not find any irregularities, leading the Tribunal to conclude that invoking a longer period for verification was unjustified. Therefore, the Tribunal found the impugned order lacking merit and allowed the appeal with consequential relief.In conclusion, the Tribunal's decision was based on the interpretation of the relevant Govt. circular, emphasizing the importance of maintaining accurate records by the appellant and the lack of evidence supporting the denial of deemed credit. The Tribunal's ruling highlighted the significance of following circular provisions and conducting audits to ensure compliance, ultimately leading to the appeal being allowed in favor of the appellant.