Whether cenvat credit available on basis of Xerox copy of Bill of Entry when originals were destroyed by fire?

PJ/Case law/2013-14/1927

Case:- HI-TECH INKS P. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, DAMAN

Citation:-2013(296) E.L.T 365 (Tri.-Ahmd.)

Brief Facts:-This appeal has been filed by the appellant against OIA No CS/107/DMN/VAPI-I/2011-12, dated 25-11-2012 under which the order-in-original dated 24-12-2010, denying Cenvat credit of Rs. 2,98,600/- and imposing penalty of Rs. 2,98,600/-, has been upheld. The issue involved is that appellant availed Cenvat credit of Rs. 2,98,600/- on the basis of Xerox copy of bills of entry which was detected during an audit of the appellant. A show cause notice dated 2-12-2009 was issued to the appellant for denying the Cenvat credit. During the adjudication proceedings appellant did not produce the original bills of entry for explaining that the inputs were duty paid and were used in the manufacture of finished excisable goods. Before Commissioner (A) a plea was taken that the original bills of entry were destroyed in a fire in the applicant's factory for which an FIR was also lodged. However, Commissioner (A) did not agree with the contention raised by the appellant because copy of FIR produced by them was with respect to fire in their factory and not with respect to the loss of the concerned original Bills of entry.

Appellant Contentions:- Appellant has argued that the fact of payment of duties on inputs and their receipt in the factory has not been disputed by the department, therefore, the Cenvat credit is admissible on the basis of Xerox copies in view of the following judgments : -
(i)     CCE, Kolhapur v. Shah Precicast P. Ltd. [2011 (269) E.L.T. 407 (Tri.- Mumbai) = 2012 (26) S.T.R. 187 (Tri.-Mumbai)],
(ii)   Controls & Drives Coimbatore (I') Ltd. v. CCE, Coimbatore [2008 (222) E.L.T. 470 (Tri.-Chennai)]
(iii) CCE v. Amal Rasayan Ltd. [1993 (68) E.L.T. 446 (Tri.)]
(iv)Switzer Instrument Ltd. v. CCE Chennai [2008 (228) E.L.T. 589 (Tri. Chennai)].

Respondent Contentions:-Ld. AR on the other hand relied upon the following case laws and argued that Cenvat credit cannot be taken on the strength of Xerox copies of the bills of entries.
(i)     Ahmednager Alloys P. Ltd. v. CCE, Aurangabad [2010 (251) E.L.T. 319 (Tri.-Mumbai)].
(ii)   CCE, Surat v. Survoday Blending (P) Ltd. [2012 (278) E.L.T. 373 (Tribunal) = 2012 (28) S.T.R. 104 (Tribunal)].

Reasoning of Judgment:- After perusal of the case records and the rival submissions made the only point required to be decided is whether Cenvat credit can be availed on the basis of Xerox copies of the bills of entry when the original duty paying documents have not been made available by the appellants. As per the Rule 9(1) of the Cenvat credit Rules, 2004 the duty paying documents, on the strength of which Cenvat credit can be taken under the Cenvat Credit Rules are specified. It is not disputed and is commonly understood that the Cenvat credit as per the provisions has to be taken on the basis of the original copy of the document (bills of entry in this case). Appellant has taken the argument that as per several judicial pronouncements Cenvat credit on the basis of Xerox copy of bills of entry is admissible. It is observed from the relied upon case laws that in the case of CCE, Kolhapur v. Precicast P. Ltd. (supra) efforts were made by the appellants in that case to obtain certified copy of the document showing duty paid on the inputs from the concerned Commissionerate. Similarly in the case of Controls & Drives Coimbatore (P) Ltd. v. CCE, Coimbatore (supra) there were 4 or 5 importers who imported the inputs on the basis of courier consolidated bill of entry. The original courier Bill of entry with respect to such duty paying goods may not be available with a particular assessee taking Cenvat credit. In the case of CCE v. Amal Rasayan Ltd.(supra) also it was a case of late submission of original duty paying document after getting a proper endorsement and not Xerox copies only. In the case of Switzer Instrument Ltd. v. CCE, Chennai(supra) assessee did not agitate the admissibility of Cenvat credit rather he abandoned Cenvat credit claim and paid the dues before filing of the appeal. Hon’ble CESTAT in that Case, therefore, held that no penalty is imposable. From the above observations it is seen that facts of all the case laws relied upon by the appellant were different than the instant case. In the present case no efforts were made by the appellants to approach Jurisdictional Officer for necessary certification regarding duty paid nature of inputs. It is also observed from the show cause notice, reply of the appellants before the original adjudicating authority and records of this appeal filed by the appellant that original bills and entry were never available with the appellants and that is why straightway after receipt of show cause notice they started justifying their claim on the lines of receipt and utilization of inputs in the manufacturer of finished goods. In the present case, immediately on receipt of show cause notice the appellant should have come forward with the original copies of bills and entry to justify that Cenvat credit was properly taken. It has been rightly observed by Commissioner (A) that copy of FIR only talks about the fire in the factory and not about the loss of the concerned bills of entries. It is also not clear from the facts stated by the appellant in their appeal as to when the fire broke out, whether it was before the adjudication proceeding were completed by the original adjudicating authority or afterwards. Because no such discussion is coming out from the order-in-original that appellant has claimed the originals to have been lost in a fire. The fire, if any, must have broken out only after adjudication proceedings got completed. Therefore, argument of the appellants that original bills and entry were destroyed in the fire and were not available, is not acceptable and it is held that original documents for taking Cenvat credit were never available with them and Cenvat credit cannot be taken on the strength of Xerox copies of bills of entry under Rule 9(1) of the Cenvat credit Rules.
In view of the above observations the Cenvat credit has been correctly denied to the appellant and penalty has been correctly imposed by Commissioner (A). Appeal filed by the appellant is accordingly dismissed.

Decision:-Appeal dismissed.

Comment:-The substance of this case is that cenvat credit shall be available only when original duty paying document is produced by assessee as per Rule 9(1) of CCR, 2004. As in the present case no efforts were made by the appellants to obtain certified copy of the bill of entry showing duty paid on the inputs, and no evidences were brought to substantiate the contention that bill of entries were destroyed in fire, the credit was denied and penalty was also confirmed.

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PJ/Case law/2013-14/1927

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