2009 (8) TMI 554 - AT - Central Excise

Tribunal Upholds Commissioner's Orders on Goods Non-Rectifiability & Documentation

The Tribunal upheld the Commissioner (Appeals) orders, rejecting both appeals due to the non-rectifiability of goods, lack of essential documentation, and ... Cenvat credit- The appellants are engaged in the manufacture of Leather Shoes and Upper Soles classifiable under Chapter 64 of the Schedule to the Central Excise Tariff Act, 1985. During scrutiny of the ER-I Return, it was noticed that the appellant availed Cenvat credit for the period May, 2004 to September, 2004 and April, 2005 to January, 2006 amounting to Rs. 3,38,548/- and 1,42,585 respectively. The appellants availed credit under Rule 16 of the Central Excise Rules on the duty paid returned goods. Two show cause notices were issued proposing to deny the credit on the ground that credit availed by them would not represent the amount of duty actually paid by them and there was no mention of the invoice number under which the goods were earlier cleared. The Original Authority confirmed the demand of duty of Rs. 3,38,548/- and Rs. 1,42,585/- and also imposed penalty of Rs. 20,000/- and Rs. 15,000/- respectively. The Commissioner (Appeals) upheld the adjudication orders. Held that- In the present case, the appellant stated that the goods are not rectifiable. It is also seen that they have not produced the records as required under the Rule. Hence, the demand of duty and penalty are justifiable. In view of the above discussions, I do not find any reason to interfere the order of the Commissioner (Appeals). Accordingly, both the appeals are rejected. Issues:1. Availment of Cenvat credit on duty paid returned goods under Rule 16 of the Central Excise Rules.2. Admissibility of evidence regarding receipt of duty paid returned goods.3. Rectifiability of goods and compliance with Rule 16 requirements.4. Justifiability of demand for duty and penalty.Analysis:1. The case involved the appellants availing Cenvat credit on duty paid returned goods under Rule 16 of the Central Excise Rules. The appellants claimed credit for specific periods but faced show cause notices questioning the availed credit. The Original Authority confirmed the duty demand and imposed penalties, which were upheld by the Commissioner (Appeals).2. The appellant's advocate argued that they received duty paid returned goods, availed credit based on supplier's invoice, and cleared goods after rectification with intimation to the Central Excise authorities. The advocate highlighted discrepancies in the observations of the Commissioner (Appeals) regarding evidence of receipt of goods and requested an opportunity to produce additional documents.3. The Departmental Representative reiterated the findings of the Commissioner (Appeals) stating lack of evidence on receipt of duty paid goods. The DR emphasized the time elapsed since the goods were cleared and referenced correspondence indicating the goods were not rectifiable. The Range Superintendent's report also indicated limited clearance of goods after two years.4. Upon review, the Tribunal noted the appellant's admission that the goods were not rectifiable and the absence of essential details supporting the credit availed. The Range Officer's report further confirmed partial clearance of goods after an extended period. The Tribunal found the appellant's failure to produce required records and compliance with Rule 16, justifying the duty demand and penalties imposed.In conclusion, the Tribunal upheld the Commissioner (Appeals) orders, rejecting both appeals based on the non-rectifiability of goods, lack of essential documentation, and non-compliance with Rule 16 provisions. The decision was pronounced on 13-8-2009, affirming the demand for duty and penalties as justified under the circumstances.