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2007 (3) TMI 109 - AT - Central ExciseAvailment of Cenvat credit - Question arises whether appellant is entitle for a availment of Cenvat credit on the basis of the documents issued by second stage dealer - Held yes
Issues: Availment of Cenvat credit based on documents issued by a second stage dealer.
Analysis: 1. The appeals before the Appellate Tribunal CESTAT, Bangalore raised a common question regarding the acceptability of Cenvat credit based on documents issued by a second stage dealer. The appellants received goods from a second stage dealer, M/s. REC Ispat, who had received them from M/s. RINL. The issue was whether the Cenvat credit claimed by the appellants was valid under Board Circulars 137/48/95-CX and 218/52/96-CX. The Original Authority granted the credit, citing compliance with the Circulars, but the Commissioner overturned this decision, leading to the current challenge. 2. The goods in question were manufactured by a PSU unit, M/s. RINL, and sold to an unregistered dealer who then consigned the goods to a registered dealer without making any sales. The registered dealer subsequently sold the goods to the appellants, issuing second stage dealer invoices. The Revenue disputed the validity of the credit claimed. However, the Circulars issued by the CBEC clarified that the first stage dealer did not need to be registered as long as the goods were sent to the consignee in entirety. The Original Authority correctly concluded that the appellants were eligible for the credit based on this interpretation. 3. After hearing both parties, the Tribunal found that the Revenue's objections were not sustainable in light of the Board Circulars. The original contractor sold the goods to a registered dealer who issued the necessary second stage documents, in accordance with the Circulars. Therefore, the Tribunal upheld the Original Authority's decision, setting aside the Commissioner's order and allowing the appeal. The judgment emphasized the importance of adhering to the Circulars in determining the eligibility of Cenvat credit based on documents from a second stage dealer. (End of Analysis)
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