DCW LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THESE are applications for waiver of predeposit and stay of recovery in respect of certain amounts of CENVAT credit disallowed to the assessee by the lower authority. In Appeal No. S/52/2007, the challenge is against such denial of CENVAT credit to the extent of over Rs. 18 Lakhs, out of which the chief component is an amount of over Rs. 15 lakhs, which is the amount of input service tax credit denied to the assessee on the ground that the prescribed cenvatable documents were not submitted for verification. In this connection, it is submitted by learned Counsel for the assessee that, in fact, the relevant documents viz. invoices and connected documents, were produced along with the reply to the relevant show -cause notice, for verification by the adjudicating authority. It is his case that, as in certain other cases of the same assessee, the Commissioner ought to have asked for verification report from the range officer for the purpose of ascertaining as to whether documents were admissible for CENVAT credit. The assessee's grievance is that this was not done. We have heard learned SDR also who refers to para 24 of the impugned order and submits that the invoices and other documents prescribed under Rule 9 of the CENVAT Credit Rules, 2004 were not made available to the adjudicating authority for verification. On a perusal of the impugned order, we note that learned Commissioner recorded the claim of the assessee that the invoices/bills/challans issued by the input service provider under Rule 2(m) of the CCR had been produced by them for verification. However, learned Commissioner observed that such documents were not available with the assessee for verification. If the assessee had already produced the documents before the Commissioner, how could such documents still be available with the assessee? This poser has not been satisfactorily answered by SDR. There are also minor amounts of input service tax credit disallowed by the Commissioner, but, for the present purpose, we do not want to enter into an enquiry as regards such credits. Insofar as the main part of the subject -matter of the dispute is concerned, the assessee has made out prima facie case. Accordingly, in Appeal No. S/52/2007, there will be waiver of predeposit and stay of recovery as prayed for.

(2.) IN Appeal Nos. S/53 and 62/2007, the challenge is mainly against denial of CENVAT credit on the ground that the documents on the strength of which input service tax credit was availed by the assessee were not admissible for the purpose. Credit to the extent of Rs. 7.7 lakhs was denied on this ground in the order impugned in Appeal No. S/62/2007. CENVAT credit of Rs. 2,42,431/ - was disallowed on the same ground in the order impugned in Appeal No. S/53/2007. Some of the impugned documents are letter heads of service providers and other documents are debit notes issued by service providers. These documents have been held to be inadmissible for CENVAT credit in terms of Rule 9(f) of CCR, 2004. The case of the assessee, reiterated today by their counsel, is that these documents contained ail the requisite particulars for the purpose of availing CENVAT credit. This claim has been contested by learned SDR, who, with reference to Rule 4 of the Service Tax Rules, 2004, submits that the "letter head documents" and debit notes do not conform to the requirements of Rule 4 ibid. In his rejoinder, counsel submits that this procedural deficiency is condonable as held by the Tribunal in various cases. We asked for specimens of "letter head documents" and debit notes for our scrutiny, but none is available with learned Counsel. In the circumstances, we are of the view that the appellants should predeposit 50% of the amount of CENVAT Credit denied by the Commissioner on the aforesaid ground. Accordingly, in Appeal No. S/53/2007, they should predeposit an amount of Rs. 1,21,215/ - for the purpose of Section 35F of the Central Excise Act. In this appeal, there are other minor amounts of CENVAT credit denied by the Commissioner which were ignored for the present.

(3.) IN Appeal No. S/62/2007, there is a major amount (Rs. 7,35,900/ -) of CENVAT credit disallowed by the Commissioner on the ground that the prescribed documents were not submitted for verification. Here again, it was the claim of the assessee before the adjudicating authority that the requisite documents were produced along with reply to the show -cause notice, but the Commissioner took the stand that the documents were not available with the assessee for verification. We have already considered a similar situation in an earlier part of this order and our findings will equally apply to the present context and, accordingly, there will be waiver of predeposit and stay of recovery in respect of the aforesaid amount of Rs. 7,35,900/ -. This appeal also contains a challenge against denial of credit of Rs. 7,73,231/ -, which was denied on the ground that the documents on the strength of which the credit was taken were not admissible for the purpose in terms of Rule 9(f) of the CCR, 2004. We have already dealt with a similar situation in the earlier case and, accordingly, the assessee has to predeposit 50% of the above amount. There are also other amounts of CENVAT credit denied to them, which are too small to be considered at present.