2010 (12) TMI 1019 - AT - Central Excise

Input credit procured on the strength of Cenvatable invoice/Bills of Entry wherein the name of the buyer was mentioned is the predecessor of the respondent from whom the respondent has taken over their business in total - Revenue is in appeal is that as no credit was lying against these inputs at the time of taking over of the unit of M/s. Otis Elevator Co. (I) Ltd. by the respondent, the respondent is not entitled to take the credit - Held that - Omission on the part of the consignor not showing consignee s name and address cannot result in denial of substantive concession to the assessee inasmuch as in the instant case the receipt of the inputs has not been disputed, neither the duty paid nature of the same, hence the assessee is entitled to take the credit on the inputs procured by them against the Cenvatable invoice. respondent is entitled to take input credit on the inputs procured by them on the strength of Cenvatable invoice/Bill of Entry against which they have received the goods in their factory, appeal filed by the Revenue is rejected.

Summary

Issues:
Revenue's appeal against respondent taking input credit without proper permission and against duty paid invoices in the name of predecessor.

Analysis:
The main issue in this case is whether the respondent, who took over a business unit, is entitled to take input credit on inputs procured against Cenvatable invoices/Bills of Entry in the name of the predecessor. The Revenue argued that since no credit was available against these inputs at the time of the unit transfer, the respondent should not be allowed to take the credit without proper permission. However, the respondent contended that they had sought permission from the concerned officer, but it was delayed, and they eventually informed the department before utilizing the credit. The key point of contention was that the invoices were not in the name of the respondent, but they were duly endorsed in their favor.

After considering the submissions, the judge found that the crux of the matter was whether the respondent could claim credit on invoices not in their name but endorsed in their favor. The judge emphasized that under Central Excise law, credit can be taken only on duty paid inputs received in the factory. The judge distinguished this case from a mere transfer of Cenvat credit, as the inputs were procured post the unit takeover. Referring to a precedent, the judge ruled that the omission of consignee details on invoices does not negate the right to claim credit if receipt and duty payment are not in question. Therefore, the judge held that the respondent was entitled to claim input credit on the procured inputs against Cenvatable invoices, as they had received the goods in their factory.

Consequently, the judge upheld the impugned order, rejecting the Revenue's appeal. The decision was based on the principle that the respondent had a valid claim to the input credit under the circumstances presented.