2015 (3) TMI 424 - AT - Central Excise

Denial of Input Credit on Aluminium Tubes Upheld Based on Quality Control Officer's Statement

The Tribunal upheld the denial of input credit on aluminium collapsible tubes based on the Quality Control officer's conclusive statement, citing the ... Denial of CENVAT Credit - Receipt of defective tubes - Tubes were returned to the supplier for repair but instead of repair of the said tubes, the supplier supplied fresh tubes without payment of duty - Held that:- Shri P.M. Narvekar, the Quality Control officer of the appellant have made a statement under Section 14 of the Central Excise Act, 1994 on 11.09.1993 confirming that they are receiving fresh manufactured “aluminium collapsible tubes” as replacement for the rejected tubes from M/s. Jyoti Record Manufacturing Co. Ltd. The statement of the Quality Control officer is relevant to decide the issue before me. The said statement confirmed the allegation alleged against the appellant as the said statement has not been retracted. Therefore, as per the decision of CC vs. D. Bhoormull [1974 (4) TMI 33 - SUPREME COURT OF INDIA] wherein it is held that what is admitted need not be proved; the statement of the Quality Control Officer is conclusive. - Decided against assessee. Issues:1. Denial of input credit on aluminium collapsible tubes.2. Allegation of receiving fresh tubes without payment of duty.3. Lack of corroborative evidence and reliance on a statement under Section 14 of the Central Excise Act, 1994.4. Interpretation of the statement of Quality Control officer as conclusive evidence.Detailed Analysis:Issue 1: The appellant appealed against the denial of input credit on aluminium collapsible tubes. The appellant, a toothpaste manufacturer, received defective tubes from a supplier and returned them for repair. Instead of repairing the tubes, the supplier provided fresh tubes without duty payment, leading to the denial of credit. The Adjudicating Authority confirmed the demand, but the Commissioner (Appeals) remanded the matter for fresh consideration. Subsequently, the Adjudicating Authority dropped the show-cause notice, which was challenged by the revenue before the Commissioner (Appeals), resulting in the appeal before the Tribunal.Issue 2: The appellant argued that the revenue's case lacked corroborative evidence and relied solely on a statement made by the Quality Control officer. The appellant contended that the defect in the tubes was rectifiable, and without proper examination of records, it could not be conclusively stated that fresh tubes were supplied. Conversely, the revenue supported the impugned order, emphasizing the Quality Control officer's statement.Issue 3: After hearing both sides and examining the records, the Tribunal noted the statement made by the Quality Control officer confirming the receipt of fresh aluminium collapsible tubes as replacements for rejected tubes from the supplier. The Tribunal referred to the decision in CC vs. D. Bhoormull 1983 (13) ELT 1546 (SC), stating that admissions need not be proved, and considered the Quality Control officer's statement as conclusive evidence. The Tribunal found no infirmity in the impugned order and upheld the decision to deny input credit, ultimately dismissing the appellant's appeal.In conclusion, the Tribunal upheld the denial of input credit on aluminium collapsible tubes based on the conclusive statement of the Quality Control officer, emphasizing the legal principle that admissions do not require further proof. The lack of corroborative evidence and the rectifiability of defects in the tubes were insufficient to overturn the decision, resulting in the dismissal of the appeal.