Tribunal overturns duty confirmation and penalties in full. Judgment by Mrs. Archana Wadhwa.

The Tribunal allowed both appeals in full, setting aside the duty confirmation and penalties imposed on the appellants. The judgment was pronounced by Mrs. Archana Wadhwa, Judicial Member of the Appellate Tribunal CESTAT ALLAHABAD on 27/11/2017.

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Issues:
1. Shortages of raw materials in stock leading to duty implications
2. Denial of cenvat credit based on invoices from a non-operational manufacturer

Analysis:
1. The case involved shortages of 1800 Kg of raw materials in the stock of a company manufacturing thermocol products, resulting in a duty implication of &8377; 28,032. The company attributed the shortage to staff negligence but reversed the credit to that extent. The Revenue initiated proceedings for denial of cenvat credit amounting to &8377; 2,24,556 based on invoices from a manufacturer not engaged in manufacturing activities for the past two years. The lower authorities passed an order leading to the present appeal.

2. Regarding the shortages issue, the Tribunal referred to a judgment by the Hon'ble High Court of Allahabad in Commr. Vs. Minakshi Castings, stating that shortages alone, without corroborative evidence, cannot establish clandestine removal. Therefore, the demand based solely on shortages was not upheld. On the denial of credit issue, the Tribunal noted that the invoices contained duty paying particulars, and payment was made to the supplier via Account Payee Cheque. The Tribunal cited precedents like Commr. of Central Excise & Customs, Kanpur Vs. Juhi Alloys Ltd. and decisions from the Hon'ble High Courts of Allahabad and Punjab & Haryana, emphasizing that the duty payment evidence in the invoices was sufficient. Consequently, the Tribunal set aside the duty confirmation and penalties imposed on the appellants.

In conclusion, the Tribunal set aside the impugned orders, allowing both appeals in full. The judgment was pronounced on 27/11/2017 by Mrs. Archana Wadhwa, Judicial Member of the Appellate Tribunal CESTAT ALLAHABAD.

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