2010 (4) TMI 1046 - HC - Central Excise

CENVAT Credit - credit denied that the gods not manufactured by the manufacturer - Whether the Hon'ble Tribunal was right in holding that credit can be allowed merely on the strength of the invoices of manufacturer if the goods are not manufactured by him? HELD THAT - Tribunal has rightly held that even if the alternator may have been manufactured at Delhi as contended by the revenue, as long as the duty liability of such alternator had been discharged by the supplier, entitlement of the respondent company to avail of CENVAT credit in respect of the duty paid on the capital goods in question cannot be disputed.

Summary

Issues:
Challenge to Tribunal's order allowing credit based on manufacturer's invoice without actual manufacturing by the manufacturer.

Analysis:
The appellant-revenue contested the Tribunal's order allowing CENVAT credit based on an invoice from a manufacturer who did not actually manufacture the goods. The respondent received a Slow Speed Alternator with AVRS and Voltage Control System from M/s Ishan Technologies Pvt. Ltd. under an invoice showing duty paid. However, investigations revealed that M/s Ishan did not manufacture the alternator, leading to confiscation of goods, disallowance of credit, and imposition of penalties.

The Tribunal, after considering evidence and relevant Rules, found that the duty on the capital goods was paid by M/s Ishan as per the invoice, and the respondent received the alternator. The Tribunal relied on CENVAT Credit Rules, 2002, emphasizing the duty of the input receiver to ensure duty payment by the manufacturer. The respondent provided documents proving M/s Ishan's payment of duty, satisfying Rule 7 of the Rules.

Moreover, the Tribunal noted that the issue of M/s Ishan's eligibility for duty refund was not under consideration. Citing a previous court decision, the Tribunal held that unless there was clear evidence that the goods were not received by the respondent, the benefit favored the respondent. The Tribunal highlighted that as long as duty was paid and goods received, CENVAT credit could not be denied.

Ultimately, the Tribunal's order was upheld as legally sound, with no substantial question of law warranting interference. The appeal was dismissed due to the absence of any legal infirmity in the Tribunal's decision.