2011 (4) TMI 365 - AT - Central Excise

CENVAT Credit on inputs - Documents for availing cenvat credit - Held that - credit has been availed on the basis of invoice issued by the 1st/2nd stage dealer and not on the basis of commercial invoice issued by M/s Darmin Steel Suppliers - Rule 9 has no such requirement that the payment should be made to the 1st/2nd stage dealer only - Further, what is required is goods must have been received and utilized for manufacture - Even though the rules have undergone modifications, the principles underlying availment of CENVAT Credit remain the same - Therefore, this circular issued by the Board Circular No.218/52/96-CX, dt.4.6.96 is applicable - There is no dispute that appellants did purchase the goods and there is absolutely no evidence to show that even one transaction out of several is not genuine and goods have not been received but only bills have been raised - Since there is no evidence to show that inputs have not been received and in all the cases, invoices issued by the 1st/2nd stage dealer show the name of the appellant as consignee and credit has been taken on that basis - Decided in favour of assessee.

Summary

Issues:
Availment of CENVAT Credit based on invoices issued by intermediary dealers instead of direct purchase from the original dealers.

Analysis:
The case involved the appellants availing CENVAT Credit based on invoices issued by intermediary dealers, namely M/s Monarch Steels and M/s Darmin Steels, instead of directly purchasing from the original dealers such as M/s Bikaner Agrico, M/s Parshvam Steel Corpn., and M/s Sanjay Steel Traders. The Revenue objected to the credit availed, arguing that since the goods were received through the intermediary dealers, who did not issue Central Excise invoices, the appellants were not entitled to avail the credit. However, the invoices from the original dealers did mention the appellants as the consignee of the goods, and all necessary details as per Rule 9 of CENVAT Credit Rules, 2004 were present in these invoices.

The Tribunal referred to a previous decision in the same appellant's case where a similar issue was addressed. The Tribunal emphasized that Rule 9 of CENVAT Credit Rules does not mandate that payment must be made to the original dealer for availing credit, but rather requires that goods must have been received and utilized for manufacture. The Tribunal also cited Circular No.218/52/96-CX issued by the Board, stating that the principles underlying availment of CENVAT Credit remain the same despite rule modifications. The Tribunal highlighted that ownership of inputs is not a legal requirement, and in the absence of evidence showing that goods were not received, the credit availed based on invoices from the original dealers with the appellants listed as consignees was deemed valid.

Based on the above analysis, the Tribunal concluded that the impugned order denying the credit was not sustainable. The Tribunal set aside the order and allowed the appeal in favor of the appellants, providing consequential relief. The stay petition and appeal were disposed of accordingly.