By TIOL News Service

MUMBAI, MAR 25, 2013: THE appellant received a consignment of duty-paid inputs from M/s. Rashtriya Ispat Nigam Ltd., Pune vide invoice No. 2007005407 dated 05/12/2007 which was transported vide Truck No. MH-06-K-1000. 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 Sonai Police Station, Ahmednagar.

The appellant vide letter dated 19/12/2007 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.

The wait became unbearable and so the appellant took CENVAT credit of the duty involved of Rs.57,792/-.

This probably made the Assistant Commissioner wake up from slumber and spring into action. He rejected the assessee's request and denied the credit and, thereafter, issued a SCN dated 20/10/2009 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.

A couple of months down the line the SCN was adjudicated and the demand was confirmed along with interest and penalty.

The Commissioner(A) directed the appellant to make pre-deposit of the duty demanded which they didn't and so their appeal was dismissed for non-compliance of s.35F of the CEA, 1944.

After this order was passed the appellant reversed the CENVAT credit.

They filed an appeal before the CESTAT but there was a delay of more than 5 months in filing the appeal which delay was condoned by the Bench holding that the reasons given appear to be genuine.

None appeared for the appellant.

The Bench went through the appeal memorandum and passed the following order -

"4.1 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.

5. 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…."

Accordingly, the appeal was allowed with consequential relief.

(See 2013-TIOL-504-CESTAT-MUM)