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of <h1>Tribunal grants partial appeal, emphasizes evidence verification for Modvat credit claim.</h1> <h3>M/s. Bharat Heavy Electricals Ltd. Versus The Commissioner, Central Excise, Bhopal</h3> M/s. Bharat Heavy Electricals Ltd. Versus The Commissioner, Central Excise, Bhopal - 2014 (313) E.L.T. 65 (Tri. - Del.) Issues:1. Denial of Modvat credit for a diesel engine used in a DG set.2. Disallowance of Modvat credit due to the submission of a photocopy of the bill of entry.3. Dispute regarding the recording of input credit in the statutory record within the specified timeframe.4. Levy of penalty unjustified due to success in denying credit.Issue 1: Denial of Modvat credit for a diesel engine used in a DG setThe appellant claimed Modvat credit for a diesel engine used in a DG set, which was denied by the Revenue. The appellant argued that the diesel engine was an essential input for the functioning of the DG set, and therefore, the denial of Modvat credit was unwarranted. The tribunal agreed with the appellant, stating that the diesel engine had become an input for the DG set, and thus, the denial of Modvat credit was not justified.Issue 2: Disallowance of Modvat credit due to the submission of a photocopy of the bill of entryAnother issue arose when Modvat credit was disallowed due to the appellant submitting a photocopy of the bill of entry instead of the original. The appellant contended that both the original and photocopy were presented to the Superintendent for verification. The tribunal examined the bill of entry and noted that it had been verified by department officials, leading to the conclusion that the appellant succeeded in this dispute as well.Issue 3: Dispute regarding the recording of input credit in the statutory record within the specified timeframeThe appellant faced a dispute regarding the recording of input credit in the statutory record within the prescribed 6-month period. The appellant argued that the recording of the input in part 1 of the RG 23 Register granted them the right to the credit, even if the entry in part 2 was not made within the specified timeframe. The tribunal agreed with the appellant, emphasizing that the right to credit accrues when duty is paid on the input, and there was no statutory bar to deny the credit based on the recording timeframe.Issue 4: Levy of penalty unjustified due to success in denying creditLastly, the appellant contested the levy of a penalty of Rs.1.00 Lakh, arguing that it was unwarranted since they had succeeded in all three counts of denying credit. The tribunal agreed with the appellant, stating that the penalty without intention of evasion was unjustified, and therefore, waived the penalty.In conclusion, the tribunal allowed the appeal partly, remanding the matter for the verification of the claim of Modvat credit of Rs.35,68,324. The tribunal emphasized the importance of verifying evidence for the claim and ensuring that the appellant receives the benefit of Modvat credit where applicable.
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