2017 (3) TMI 170 - AT - Central Excise

Appellant wins appeal on Cenvat Credit denial due to photocopy issue, fresh assessment ordered.

The appellant was denied Cenvat Credit based on a photocopy of a courier Bill of Entry and specific inputs not deemed related to the final product's ... Cenvat credit admissibility on photocopy of courier Bill of Entry - proof of use of inputs in or in relation to manufacture - remand for de novo adjudication to determine factual useCenvat credit admissibility on photocopy of courier Bill of Entry - Cenvat credit cannot be denied merely because the importer possesses only a photocopy of a consolidated courier Bill of Entry. - HELD THAT: - The Tribunal noted that consolidated Bills of Entry filed for courier consignments may cover multiple importers and that it is not practicable for each importer to retain the original Bill of Entry. Accepting the departmental position that courier Bills of Entry are routinely filed in consolidated form for various importers, the Tribunal held that a photocopy of the courier Bill of Entry is an acceptable document for claiming Cenvat credit and credit cannot be refused solely on the ground that the original is not available.Credit admissible on photocopy of consolidated courier Bill of Entry; denial on that ground set aside.Proof of use of inputs in or in relation to manufacture - remand for de novo adjudication to determine factual use - The question whether the imported items were used in or in relation to manufacture was not examined by the lower authorities and therefore requires fresh adjudication. - HELD THAT: - The Tribunal observed that neither the adjudicating authority nor the Commissioner (Appeals) examined the factual matrix regarding actual use of the imported inputs (such as steel door with frames, gasket, paper cartridge). Because the factual inquiry into whether the inputs were used in or in relation to manufacture was not undertaken, the Tribunal set aside the impugned order and remanded the matter for de novo adjudication. The adjudicating authority is directed to afford the appellant opportunity for personal hearing and to accept additional documents supporting actual use, and to decide the issue within three months.Matter remanded for fresh adjudication on the issue of actual use of the imported inputs in manufacture.Final Conclusion: The appeal is allowed in part: the denial of Cenvat credit solely for lack of original consolidated courier Bill of Entry is set aside, and the matter is remanded to the adjudicating authority for de novo consideration of whether the imported inputs were used in or in relation to manufacture, with opportunity to the appellant to be heard and to submit documents, to be decided within three months. Issues:1. Entitlement to Cenvat Credit based on a photocopy of courier Bill of Entry.2. Denial of credit for specific inputs not used in or in relation to the manufacture of final product.Analysis:The judgment addresses the issue of whether an appellant is entitled to Cenvat Credit based on a photocopy of a courier Bill of Entry. The adjudicating authority had denied the credit, stating that original duty paying documents were necessary for admissibility. Additionally, a specific amount of credit was denied for inputs like steel doors, frames, gaskets, and paper cartridges, claiming they were not used in or in relation to the manufacture of the final product. The appellant appealed to the Commissioner (Appeals) after the Order-in-Original was unfavorable. The Commissioner rejected the appeal, leading to the appellant's further appeal.During the proceedings, the appellant's counsel argued that it is a common practice to file a consolidated bill of entry for various importers, making it impractical for every importer to possess the original Bill of Entry. Therefore, the appellant had availed credit based on a photocopy of the Bill of Entry. The counsel cited a relevant judgment to support this argument. The lack of verification regarding the actual use of the imported goods was highlighted, emphasizing that deeming the goods inadmissible for Cenvat credit without understanding their use was improper.On the other hand, the Revenue representative reiterated the findings of the impugned order, maintaining the denial of credit. After considering the submissions from both sides and reviewing the records, the Member (Judicial) found that in the case of Cenvat credit based on a courier Bill of Entry, it was not feasible for every importer to possess the original document due to the nature of consolidated filings. Therefore, denying credit based on a photocopy was deemed unjustified. Regarding the use of the imported goods, it was noted that neither the adjudicating nor appellate authority had examined this aspect, leading to a remand for further adjudication. The impugned order was set aside, and the matter was remanded to the adjudicating authority for a fresh assessment within three months, allowing the appellant an opportunity for a personal hearing and submission of additional documents to demonstrate the actual use of the goods. The appeal was allowed by way of remand, providing a chance for a more thorough review of the case.