2009 (2) TMI 664 - AT - Central Excise

Summary

Issues: ROM application challenging the order passed by the Tribunal regarding Cenvat Credit Rules interpretation and obligations of the manufacturer under Rule 7.

Analysis:
1. Interpretation of Cenvat Credit Rules and Rule 7 Obligations:
The appellant sought review of the order citing differences in their case compared to a previous judgment. The advocate argued that the goods were received after endorsement by the supplier, which was not considered in the order's discussion on the manufacturer's responsibility under Rule 7. However, the Revenue contended that the facts were akin to a previous case where goods were endorsed by the merchant manufacturer. The Tribunal acknowledged the differences in facts but emphasized that Rule 7 mandates the duty-paid verification by the recipient, regardless of direct receipt or endorsement. The Tribunal referred to the Gujarat High Court's stance on the reasonable steps required for Cenvat credit, emphasizing the need for the recipient to verify the supplier's identity and address.

2. Supplier's Role and Circular Interpretation:
The appellant argued that the supplier, considered a merchant manufacturer, fulfilled their obligation if in existence. However, the Tribunal clarified that the responsibility lies with the recipient to ensure duty payment by the supplier, irrespective of their status. The advocate referenced a circular allowing textile traders to endorse goods without registration, but the Tribunal deemed it irrelevant to the manufacturer's obligations under Rule 7. Additionally, a letter from Dhanlaxmi Textiles was presented as evidence, asserting their existence, but the Tribunal rejected its admissibility during the ROM application stage. The Tribunal emphasized that new evidence could not be considered at this point, leading to the rejection of the ROM application.

In conclusion, the Tribunal dismissed the ROM application, maintaining that the appellant failed to demonstrate any apparent mistakes in the order or records. The judgment reiterated the manufacturer's obligation under Rule 7 of the Cenvat Credit Rules, emphasizing the need for the recipient to verify duty payment on goods received, regardless of the supplier's status or endorsement practices. The decision upheld the principles outlined by the Gujarat High Court regarding reasonable steps for Cenvat credit verification, emphasizing the recipient's responsibility in ensuring compliance with the rules.