Judgment:
Per Archana Wadhwa, J.
1. After hearing both sides, duly represented by Shri K.S. Venkatagiri, Advocate and Shri V.V. Hariharan, JCDR, we find that the appellants are engaged in the manufacture of computers falling under Heading 84.71 of the Schedule to the Central Excise Act,1985. Computers were exempted from duty from 9.7.04 onwards. However, duty was again imposed on the computers @ 12% vide Sl.No.16 of the Notification No.6/2006-CE dt. 1.3.2006. As a consequence, the appellants became entitled to avail CENVAT credit of duty paid on the inputs/raw materials lying in stock either as such or in work progress or as contained in the final product.
2. There is no dispute about the above legal position of the appellants eligibility to avail CENVAT credit. It is seen that the dispute relates to quantum of credit so availed by the appellants. According to ld. advocate, availment of credit was made by them on the basis of various documents available with them. He submits that inasmuch as prior to the said date, no MODVAT credit was being availed by them as their final products were exempted. As the documents showing payment of duty on the inputs were all scattered, he clarifies that there were huge number of documents on the basis of which credit was availed. However, Revenue found that in some cases credit was availed based upon the photocopies of the invoices or the xerox copies of the invoices or some excess credit was availed, which was not due to them. As such, he further submits that verification was done by the jurisdictional Central Excise authorities. As a result, it was revealed that there were cases of excess credit, short credit, invalid/ineligible credit, documents not available and credit taken on non-excisable category. Accordingly, proceedings were initiated against them for denial of the credit, which resulted in passing of the impugned order by the Commissioner denying excess/wrongly availed credit by them. He fairly admits that whereas in some cases wrong credit was not availed, there are also instances where short credit was availed by them. The appellants made a request to the adjudicating authority to allow the credit, wherever the same is admissible but has not been availed by the appellants inadvertently. Such request of the appellants was not accepted and after rejecting their request for allowing short availed credit, the adjudicating authority confirmed the excess availed credit. Hence the present appeal.
3. The contention of the ld. advocate is that when the entire documents on the basis of which the credit was availed, were the subject matter of the proceedings before the Commissioner, he should have considered the short availed credit also instead of only confirming the excess availed credit. He submits that there is no time limit prescribed under the MODVAT Rules for availment of credit and the appellants are entitled to avail the same at any point of time. Elaborating on his arguments, he submits that inasmuch as the computers were not dutiable, the appellants were not maintaining input received documents with a view to avail the CENVAT credit. It is only w.e.f. 1.3.2006, computers became excisable and the need to avail the credit arose. In view of this, consequently, some of the documents were not available in original and only photocopies were available with them. As such, in the absence of any dispute about the duty paid character of the inputs so received by them, the availment on the basis of photocopies of the invoices was required to be allowed. For the above proposition, he relies upon various decisions of the Tribunal.
4. Ld. JCDR, Shri V.V.Hariharan appearing for the Revenue though fairly agrees that there is no time limit for availment of credit but submits that shortly availed credit was not the subject matter of present proceedings, which has only confirmed the excess availed credit. The appellants were within their rights to avail credit to the full extent based upon the documents.
5. In his rejoinder, ld. advocate submits that appellants have not raised this issue before the adjudicating authority and the Commissioner having rejected their request, they could not have taken short availed credit.6. After appreciating the submissions made by both the sides, we find that the entire documents, on the basis of which appellants have taken the credit, were the subject matter of the present proceedings before the adjudicating authority. Whereas he has picked up those cases where the appellants have availed wrong/excess credit but he has ignored those instances where appellants have availed short credit. By verifying the entire documents for the purpose of MODVAT credit, it amounts to opening of the entire assessment, in which case, the appellants would be entitled to take short availed credit by them. When the entire documents are being scrutinized, it is only fair and just that wherever they have either not availed credit or have short availed the credit, they should be permitted to avail the same in the present proceedings. As such, we set aside the impugned orders and remand the matter to the adjudicating authority for fresh verification of the documents and allow the appellants to avail the short taken credit, if otherwise available to them. Inasmuch as we are remanding the matter for the above purpose, we direct the Commissioner to examine the appellants plea for entitlement of MODVAT credit on the basis of photocopies in the light of the decisions relied upon by them. Appellants are at liberty to place the above decisions before the adjudicating authority. Further, though we find that it is a case of non-imposition of penalty, inasmuch as mistakes in availing excess/wrong credit are not with any malafide intention and are based upon the examination/verification of huge documentary evidences, which may ultimately result in calculation errors, we leave the matte for the Commissioner to decide on the issue of penalty. Appeals are disposed of in the above terms.