2007 (10) TMI 465 - AT - Central Excise

Summary

Issues:
The issues involved in the judgment are the availability of Cenvat credit on invoices issued by a trader after the omission of Rule 12B of the Central Excise Rules, 2002 and the applicability of Rule 6 of the Cenvat Credit Rules, 2004.

Availability of Cenvat Credit:
The appellants availed Cenvat credit on invoices issued by a trader, M/s. Keetex, for an amount of Rs. 17,265/- and education cess of Rs. 346/- after the omission of Rule 12B of the Central Excise Rules, 2002. The show cause notice contended that M/s. Keetex was not a manufacturer post the omission of Rule 12B, and therefore, the appellants were not entitled to avail credit based on such invoices. The advocate for the appellants argued that they had paid duty on the final products and should not be denied credit based on the supplier's status. However, it was revealed that the appellants were aware that M/s. Keetex was a trader and not a manufacturer, indicating a lack of reasonable care in verifying the credit availed. The Tribunal noted that under Rule 6 of the Cenvat Credit Rules, 2004, only invoices issued by a manufacturer are considered valid duty paying documents for credit. As M/s. Keetex was no longer a manufacturer post the rule omission, the credit based on their invoices was rightly denied, leading to the dismissal of the appeal.

Applicability of Rule 6 of the Cenvat Credit Rules, 2004:
The Tribunal emphasized that under Rule 6 of the Cenvat Credit Rules, 2004, only invoices issued by a manufacturer are recognized as valid duty paying documents for availing credit. In this case, M/s. Keetex, the supplier of inputs, was acknowledged as a trader and not a manufacturer post the omission of Rule 12B. The appellants were aware of this fact but still availed credit based on M/s. Keetex's invoices. As the very documents used for claiming credit were not valid duty paying documents post the rule omission, the denial of credit was deemed appropriate. The Tribunal upheld the order of the Commissioner (Appeals) and dismissed the appeal, reinforcing the importance of adhering to the provisions of the Cenvat Credit Rules for availing credit.