Whether Cenvat credit can be taken on the photocopy of invoice and FIR in case duty paying documents are lost in transit?

PJ/Case Laws/2012-13/1542

Case:- M/s Varsha Forgings Ltd. Vs. C.C.E. & Cus, Aurangabad.

Citation:- 2013-TIOL-504-CESTAT-MUM

Brief Facts:-The appellant received a consignment of duty-paid inputs from supplier, which was transported vide Truck. During the course of transportation, all the documents including the duty paying documents were lost in transit by the driver of the truck and the driver lodged a complaint with the Police Station, Ahmednagar. The appellant vide letter along with copies of FIR, affidavit and Xerox copies of the invoices, informed these facts to the department and requested for permission to take credit which was never given. In the meanwhile, the appellant took CENVAT credit on the said invoices. The learned Assistant Commissioner rejected the assessee's request and denied the credit and, thereafter, issued a show cause notice demanding reversal of CENVAT credit along with interest thereon and also for imposition of equivalent amount of penalty under Rule 15 read with Section 11AC. The notice was adjudicated vide order wherein the demands were confirmed along with interest and a penalty was imposed under Rule 15. The appellant preferred an appeal before the Commissioner (Appeals) who directed the appellant to make pre-deposit of the duty demanded. Inasmuch as the appellant failed to pre-deposit the amount, the appeal was dismissed for non-compliance to Section 35F of the Central Excise Act, 1944. Subsequent to the impugned order, the appellant reversed the CENVAT credit involved in the matter. Thereafter appellant filed an appeal along with COD and Stay application before CESTAT. There is a delay of more than 5 months in filing the appeal. The appellant submits that they were waiting for a letter from the jurisdictional Superintendent with respect to the duty liability to be discharged, which they never received and in view of this, the delay occurred in filing the appeal.

Appellant’s Contention:- None appeared for the appellant.

Reasoning of judgment:-The Tribunal take up the COD application first. There is a delay of more than 5 months in filing the appeal. The appellant submits that they were waiting for a letter from the jurisdictional Superintendent with respect to the duty liability to be discharged, which they never received and in view of this, the delay occurred in filing the appeal. The reason stated appears to be genuine and the Tribunal satisfied with the same. Accordingly, Tribunal condones the delay in filing the appeal.

The Tribunal also finds that this is a case where the original documents were lost in transit by the truck driver who was transporting the goods and the truck driver, on noticing the loss, filed a FIR with the Police Station and documentary evidence are available to this effect. When the original documents are lost, the only recourse that was available to the appellant was to get a copy of the same from the supplier and take credit on the basis thereon. The appellant requested the Assistant Commissioner to grant permission for taking credit. However, the jurisdictional authorities rejected the request of the appellant. This is a case of pure and simple harassment to the assessee. If the Assistant Commissioner wanted verification of the duty payment, he could have taken up the matter with the jurisdictional authorities at the supplier's end inasmuch as the details of the invoices are available. Instead of doing that, the appellant was served with a show cause notice leading to avoidable adjudication. Powers of adjudication are given to quasi judicial authorities to sub-serve justice and not to deny them. In the instant case justice has been completely denied to the appellant. Further, the demand was also barred by time inasmuch as the notice has been issued beyond the normal period. The lower appellate authority, without even understanding the basic facts of the case directed the appellant to pre-deposit the entire amount which was not deposited and which resulted in dismissal of the appeal.

In these facts and circumstances, the entire order needs to be set aside. Inasmuch as the appellant has taken credit on the strength of photocopy of the invoices issued by the supplier, original of which was lost in transit and evidence to this effect was available on record, the appellant has rightly taken the credit in the absence of any evidence to the contrary adduced by the department. The appeal is allowed with consequential relief.

Decision:- The appeal is allowed with consequential relief.

Comment:-The essence of the case is that assessee can take credit on the strength of photocopy of the invoices issued by the supplier if original copy of invoice is lost in transit and evidence to this effect is available on record. One more thing is clear from this case is that if the department wants verification of the duty payment, it can take up the matter with the jurisdictional authorities at the supplier's end inasmuch as the details of the invoices are available.

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PJ/Case Laws/2012-13/1542

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