2018 (8) TMI 1656 - AT - Central Excise

Tribunal Upholds Decision on CENVAT Credit: Importance of Accurate Records and Evidence

The tribunal upheld the decision of the Commissioner of Central Excise & Customs (Appeals) regarding the availment of CENVAT credit on 'heavy melting ... CENVAT Credit - Appellant-assessee is alleged to have availed credit of duty paid on ‘heavy melting scrap’ purportedly received from M/s S B International, second stage dealer, on invoices that did not correspond with the receipt of stock by the appellant - Held that:- In the absence of evidence to controvert the allegation, there is no ground to interfere with the order of the first appellate authority - Appeals are dismissed - decided against appellant. Issues:1. Availment of ineligible CENVAT credit on 'heavy melting scrap' without corresponding stock receipt.2. Discrepancies in invoices and receipt of goods from the supplier.3. Interpretation of Rule 3 of CENVAT Credit Rules, 2004 regarding availment of credit.4. Maintaining proper records to establish receipt of purchased scrap.Analysis:The judgment deals with the appeal against an order modifying the original authority's decision regarding the availment of CENVAT credit on 'heavy melting scrap.' The Commissioner of Central Excise & Customs (Appeals) set aside the redemption fine but confirmed the recovery of ineligible credit and imposed a penalty. The appellant allegedly availed credit based on invoices from M/s S B International without corresponding stock receipt, leading to the dispute.The appellant's consultant argued that they received the scrap against invoices with duty paid to the supplier, justifying their entitlement to credit under Rule 3 of the CENVAT Credit Rules, 2004. They claimed lack of evidence showing non-receipt of scrap, which was acknowledged in the show-cause notice. On the other hand, the Revenue's representative contended that the supplier misrepresented prime finished goods as 'heavy metal scrap,' casting doubt on the legitimacy of the credit availed. The documents presented by the appellant were deemed insufficient to support their credit claim, despite maintaining records of scrap receipt.The tribunal upheld the first appellate authority's decision, citing the absence of evidence refuting the allegations. The appellant failed to substantiate the receipt of goods from M/s S B International, leading to the dismissal of the appeals. The judgment underscores the importance of maintaining accurate records to support credit claims and highlights the significance of aligning invoices with actual stock receipts to prevent disputes over CENVAT credit eligibility.