Input credit cannot be denied on mere tariff-heading identity when technical evidence shows the goods are different.

C-9 solvent used as fuel was found to be a different product from High Speed Diesel Oil, supported by technical reports and expert opinions showing that it did not meet HSD specifications. Credit of duty could not be denied merely because both goods fell under the same tariff heading, especially when no sample was drawn or tested at the assessee's premises and the authority proceeded on assumption rather than proof. Where supplier documentation or classification needed alteration, the proper course was first to vary the assessment at the supplier's end. Denial of credit and the consequential penalty were therefore not sustainable.

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Issues: Whether C-9 solvent used as fuel was an ineligible substitute for High Speed Diesel Oil so as to deny credit of duty paid on the input and impose penalty.

Analysis: The assessee produced technical material, including reports and expert opinions, showing that C-9 solvent and HSD were different products and that C-9 solvent did not conform to the HSD specification. The adjudicating authority had not drawn or tested any sample at the assessee's premises and had proceeded on the assumption that both goods were the same merely because they fell under the same tariff heading. The decision also proceeded on the basis that exclusion of HSD did not automatically exclude every other goods classified under the same heading. The Tribunal further noted that, where the description or classification on supplier documents is to be altered, the proper course is to first vary the assessment at the supplier's end.

Conclusion: Denial of credit and the consequential penalty were not sustainable; the appeal was allowed.

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