2010 (11) TMI 822 - AT - Central Excise

Cenvat credit - Assessee procured central excise duty paid invoice but have not received the goods mentioned in the invoice physically as the dealers who has supplied the goods have never received the goods auctioned by M/s. Ispat Industries Ltd. and the same were diverted to Viramgam units which are availing SSI exemption and are not required the duty paid invoices - Held that - Allegation that the appellant was in knowledge that these impugned goods have not suffered any duty has not been established by the department with corroborative evidence that these goods are for the Hot Rolled Trimmings (HRT). For the earlier period also this Tribunal on the similar facts have found that the Revenue has not considered the fact that the appellant has received the goods and consumed the inputs in the factory premises and paid duty for the same and there is no contrary evidence to show that the appellant has not paid duty to their supplier on the invoice raised on them and allowed CENVAT credit to the appellants appellant is entitled to avail CENVAT credit on the inputs procured by them against the duty paid invoice. Accordingly the impugned order is set aside. Appeal is allowed with consequential relief if any.

Summary

Issues:
Appeal against denial of CENVAT credit on input due to alleged diversion of goods from supplier to another unit availing SSI exemption.

Analysis:
The appellant contested the denial of CENVAT credit, asserting they received goods physically against duty paid invoices and complied with Central Excise law. They argued that any duty liability should rest with the supplier. The appellant cited a previous favorable tribunal decision and a relevant Board circular to support their case. They emphasized testing the goods and finding them as described in the invoice. The appellant argued they should not be held liable to reverse the credit. The JDR, however, contended that goods diverted to another unit were not received by the appellant, supported by a statement confirming non-receipt. The JDR argued the appellant had knowledge that received goods did not match the invoice description. The lower authority denied credit based on this discrepancy.

The tribunal considered both sides' arguments and reviewed the records. It noted the allegation that the appellant did not receive goods subject to duty. However, it found no evidence that the appellant did not receive any goods against the invoice. The tribunal emphasized the duty of the appellant to ensure goods received match the invoice description and have suffered duty. It highlighted the appellant's testing of goods and finding them in order. The tribunal cited a similar past case where the appellant had consumed inputs, paid duty, and received credit. Relying on this precedent and a relevant court decision, the tribunal held that the appellant was entitled to avail CENVAT credit on the inputs procured against duty paid invoices. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief.

This detailed analysis of the judgment highlights the key arguments, legal considerations, and the tribunal's reasoning leading to the decision in favor of the appellant regarding the CENVAT credit denial issue.