2016 (5) TMI 1318 - AT - Central Excise

CENVAT credit - credit taken on certain inputs denied on the ground that these were not actually received by the appellant s manufacturing unit - Held that - Appreciating the certificate of Chartered Engineer and also the records maintained by the appellant regarding receipt of material, I find that denial of credit to the appellant is not sustainable. Considering the nature of goods apparently no separate transport documents or lorry/freight payment, etc., is involved in these types of items - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Denial of Cenvat credit on certain inputs due to dispute over receipt at manufacturing unit.

Analysis:
The appellant, engaged in manufacturing electric bulbs, faced a challenge regarding the admissibility of Cenvat credit on inputs not physically received at their manufacturing unit in Malanpur, Bhind (U.P.). The dispute arose when the Commissioner (Appeals) upheld the denial of credit in an order dated 21-12-2015. The appellant contended that the credit was disallowed based on invoices showing the shipping address as their unit in Gwalior, despite the consignee being the manufacturing unit in Bhind. The appellant clarified that the items were shipped to Gwalior due to courier limitations and were later received at Bhind. The Chartered Engineer certified that the inputs were exclusively used at the Bhind unit, supported by material receipt notes.

The appellant's counsel argued that the denial of credit was unjustified as the goods were indeed received by the Bhind unit, despite the shipping address mentioned in Gwalior. The appellant provided substantial evidence, including the Chartered Engineer's certification and internal records, to prove the receipt and utilization of the disputed inputs at the Bhind unit. In contrast, the AR for the respondent contended that the onus was on the appellant to demonstrate the receipt of goods at their manufacturing unit, emphasizing the shipping address discrepancy as a valid reason for denying Cenvat credit.

After considering the arguments and examining the records, the tribunal observed that the consignee's name and address on the invoice clearly indicated the appellant's unit at Bhind, despite the shipment address being mentioned as Maharajpura, Gwalior. The tribunal acknowledged the Chartered Engineer's certification and the appellant's maintained records confirming the receipt of the materials at the Bhind unit. Given the nature of the goods and the absence of separate transport documents or freight payments, the tribunal deemed the denial of credit unsustainable. Consequently, the tribunal set aside the impugned order and allowed the appeal in favor of the appellant.