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2015 (10) TMI 2542 - AT - Central ExciseCENVAT credit of NCCD - manufacture of chewing tobacco, falling under Chapter sub-heading No.2404.41 of the Central Excise Tariff Act, 1985 - unbranded chewing tobacco purchased from M/s.United Tobacco Co., who availed the benefit of SSI exemption, who on bonafide belief did not pay NCCD. Therefore, the Central Excise Duty not charged in the invoices issued to the appellant - NCCD duty paid on demand by supplier and issued supplementary invoice to the appellant. The appellant took cenvat credit of NCCD in its books, which were denied by the Department on the ground that the supplier M/s.United Tobacco Co. was not registered manufacturer, and as such, taking of cenvat credit on the basis of the invoices issued by the unregistered manufacturer is not in conformity with the cenvat statute - whether, the credit can be denied on the ground that the supplier M/s. United Tobacco Co. at the time of supply of goods was not registered with the Central Excise Department, admitting the fact and the position that the NCCD was paid by the supplier, after getting itself registered with the Central Excise Department.? Held that - Rule 3 of the Cenvat Credit Rules, 2001 permits a manufacturer to take cenvat credit of various duties paid on the inputs and capital goods received in the factory. In clause (v) of Rule 3, it has been specified that National Calamity Contingent Duty (NCCD) leviable under Section 136 of the Finance Act, 2001 is permitted for availment of cenvat credit. Further, Rule 7 of the said rules prescribed the documents based on which cenvat credit can be taken by the manufacturer. In sub-rule (2) of Rule 7 of the said Rules, supplementary invoice has been recognized as the valid document for taking Cenvat credit. The decision in the case of Jayashree Aluminium & Alloys vs. CCE, Chennai 2012 (10) TMI 36 - CESTAT, CHENNAI relied upon where it was held that if the condition regarding receipt and utilization and the duty paid character of the goods are not in dispute, the credit cannot be denied on the ground that the supplier of the goods was not registered with the Central Excise Authorities at the time of supply of goods. Credit cannot be denied - appeal allowed - decided in favor of appellant.
Issues:
Whether cenvat credit can be denied based on the supplier not being registered with the Central Excise Department at the time of supply of goods. Analysis: The case involves the appellant, engaged in manufacturing chewing tobacco, purchasing unbranded chewing tobacco from a supplier who did not charge National Calamity Contingent Duty (NCCD) due to SSI exemption. The supplier later paid the NCCD and issued supplementary invoices to the appellant. The Department denied the appellant's cenvat credit claim, arguing the supplier was unregistered at the time of supply. The Tribunal considered Rule 3 of the Cenvat Credit Rules, allowing credit for duties paid on inputs, and Rule 7, recognizing supplementary invoices for cenvat credit. It noted the duty paid nature of goods and their proper utilization were not disputed. Referring to precedents, the Tribunal emphasized that if goods were duly received, utilized, and duty paid, credit could not be denied based on the supplier's registration status at the time of supply. The Tribunal concluded that since the supplier paid the NCCD after registering with the Central Excise Department and issued supplementary invoices, the cenvat credit claim by the appellant was valid. Citing previous cases, the Tribunal highlighted that when the essential conditions of receipt, utilization, and duty payment were met, denial of credit solely based on the supplier's registration status at the time of supply was unjustified. Therefore, the impugned order denying the cenvat credit was set aside, and the appeal was allowed in favor of the appellant.
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