2009 (4) TMI 747 - AT - Central Excise

CENVAT/MODVAT credit - duty paying documents - case of Revenue is that the documents being in the name of units Nos. II and III; Modvat credit cannot be availed by Unit No. I; irrespective of the fact that the inputs were received by them - Held that - The issue stands no more res integra as in the case of Larsen & Toubro v. Collector of Central Excise, Bhubaneswar 1994 (4) TMI 146 - CEGAT, CALCUTTA , it was held that duty paying documents showing address of other unit of the same manufacturer should be considered the valid duty paying documents for the purposes of MODVAT credit. As long as there is no dispute that the inputs were not received by the appellants and not utilized by the manufacturer in the final products, denial of credit on procedural ground would not be in accordance with the statute. Time limitation - Held that - As the appeal has been allowed on merits, the appellant s grievance of the demand being barred by limitation is not being addressed. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Modvat credit denial due to invoices in the name of different units. Invocation of extended period of limitation.

Analysis:
The case involved the denial of Modvat credit amounting to Rs. 1,43,162/- to the appellants because the invoices used for availing the credit were in the name of a different unit of the same manufacturer. The demand was confirmed by invoking the extended period of limitation.

The appellant's representative argued that out of the disputed 8 invoices, 2 were in the name of Unit-III and the remaining 6 were in the name of Unit-II, while the credit was taken in Unit-I. The appellant explained that the ECC number discrepancy occurred because the suppliers mistakenly mentioned 003 or 002 at the end of the registration number, which actually represented Units-I, II, and III due to the same PAN number. The show cause notice was issued based on the invoices not being in the name of Unit-I, but the authorities alleged that inputs might have been utilized in other units, which was not the ground of the notice.

The Revenue's representative reiterated that Modvat credit cannot be availed by Unit No. I if the documents are in the name of other units, regardless of receiving the inputs.

Upon considering both arguments, the judge referred to the Larsen & Toubro case, where it was established that duty paying documents showing the address of another unit of the same manufacturer should be considered valid for Modvat credit purposes. The judge noted that the Commissioner (Appeals) did not apply the decision in the Chemplast Sanmar Ltd. case as it involved rectifiable mistakes in the invoices. As long as the inputs were received and utilized in the final products, denial of credit on procedural grounds would not align with the statute. Consequently, the impugned order was set aside, and the appeal was allowed with relief to the appellant.

Since the appeal was allowed on merits, the issue of the demand being time-barred was not addressed during the judgment. The decision was pronounced on 17-4-2009.