2016 (10) TMI 1091 - AT - Central Excise

CENVAT credit - duty paying invoices - In one of the invoice credit was taken on Xerox copy of the invoice - Serial Number of the invoices either not printed or hand written - Held that - The allegation made by the Revenue is of procedural nature and for such procedural lapse substantial benefit of Cenvat credit cannot be denied as the duty payment under invoice, receipt of input and use thereof has not been disputed - In the appellant s own case PEPSICO INDIA HOLDING P LTD Versus COMMISSIONER OF CENTRAL EXCISE, MUMBAI-II 2012 (7) TMI 53 - CESTAT, MUMBAI , on the similar issue this Tribunal held that as per Rule 11 of Cenvat Credit Rules, 2002 Cenvat credit can be availed on the strength of invoice which shall be serially numbered, there is no requirement in the rule that invoice should have printed serially numbered, accordingly Cenvat credit was allowed. As regard the credit taken on Xerox copy of invoices, the issue is covered by judgment of Hon ble Gujarat High Court in case of Steelco Gujarat Ltd. 2010 (2) TMI 307 - GUJARAT HIGH COURT , where it was held that denial of credit on this procedural irregularity would not be justified - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
- Availing credit on invoices with missing or hand-written serial numbers.
- Availing credit on Xerox copy of an invoice.

Analysis:

Issue 1: Availing credit on invoices with missing or hand-written serial numbers
The appellant availed credit on invoices where the serial numbers were either not printed or hand-written. The adjudicating authority denied the Cenvat credit based on this reason. The appellant appealed, arguing that as per Rule 11 of Cenvat Credit Rules, 2002, the only requirement is that the invoice should be serially numbered, and there is no specific mandate for the serial number to be printed. The appellant also contended that the input covered in the invoices was received in the factory and used in production, fulfilling the substantial compliance for credit, despite the absence of original invoices. The tribunal referred to previous judgments, including Kamani Tubes Ltd. v. CCE, CCE v. Satyen Dyes, and CCE v. Steelco Gujarat Ltd., to support the appellant's argument.

Issue 2: Availing credit on Xerox copy of an invoice
The second issue pertained to the appellant availing credit on a Xerox copy of an invoice. The Revenue argued that this practice violated the Cenvat Credit Rules, as the invoices did not bear printed serial numbers and credit was taken on a photocopy. The Revenue emphasized that the prescribed procedures and documents for credit availed were intended to prevent fraudulent practices. They cited the judgment of the Hon’ble H.P High Court in the case of Commr. of C. Ex. v. Chandra Laxmi Tempered Glass Co. Pvt. Ltd. to support their position.

Judgment and Conclusion:
After considering the submissions from both sides and reviewing the records, the tribunal found that the denial of credit was solely based on procedural lapses, as there was no dispute regarding the receipt and use of inputs in the manufacturing process. The tribunal highlighted that the duty payment on inputs was not contested, and therefore, credit could not be denied based on procedural irregularities alone. Referring to a previous tribunal order and the judgment of the Hon’ble Gujarat High Court in the case of Steelco Gujarat Ltd., the tribunal concluded that the denial of credit was unwarranted. The tribunal set aside the impugned order, allowing the appeal and ruling in favor of the appellant.