Appellate Tribunal Upholds Credit Right for Original Invoices with Post Facto Permission

The Appellate Tribunal CESTAT, New Delhi dismissed the Revenue's appeals, upholding the respondent's right to avail credit based on original invoices with post facto permission from the Assistant Commissioner in cases of missing duplicate copies. The Tribunal affirmed the lower authorities' decisions that deemed the lapses as procedural infractions without mala fide intent, leading to the allowance of credit and the disallowance of penalties for contravention of Central Excise Rules.

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Issues:
The issues involved in the judgment are related to the availment of credit under the Central Excise Tariff based on original invoices without the duplicate copy, procedural infraction, imposition of penalties for contravention of Central Excise Rules, and the power of the lower authority to condone lapses and grant permission for credit availment.

Issue 1: Availment of Credit based on Original Invoices

The respondent, engaged in manufacturing goods under Chapter 84 of the Central Excise Tariff, had taken credit based on original invoices instead of duplicate copies, as required by relevant provisions. The Assistant Commissioner acknowledged that the goods were received and utilized in manufacturing excisable goods, with no dispute on the duty paying character of the goods. The Assistant Commissioner considered it a procedural infraction and, in the absence of mala fide intent, allowed the credit and disallowed the penalty. The Commissioner (Appeals) upheld this decision, stating that the lower authority had the power to condone the lapse and grant permission for credit availment, even post facto, if the jurisdictional Assistant Commissioner allowed it based on the original invoice due to the loss of the duplicate copy.

Issue 2: Imposition of Penalties for Contravention of Central Excise Rules

Penalties of Rs. 5,000/- and Rs. 2,000/- were imposed by the Assistant Commissioner for contravention of relevant provisions of the Central Excise Rules regarding the availment of credit based on original invoices. However, both the Assistant Commissioner and the Commissioner (Appeals) found no mala fide intent on the part of the respondent and deemed it a procedural infraction. The Commissioner (Appeals) concluded that the lower authority had the power to allow credit post facto in such circumstances, and therefore, the penalties were not warranted.

In conclusion, the Appellate Tribunal CESTAT, New Delhi dismissed the appeals by the Revenue against the respondent, upholding the decision that the respondent could avail credit based on original invoices with post facto permission from the jurisdictional Assistant Commissioner in cases where the duplicate copy was lost. The Tribunal found no reason to interfere with the lower authorities' orders and affirmed the dismissal of the appeals.

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