2011 (7) TMI 994 - AT - Central Excise

Whether appellants are entitled to take cenvat credit on the strength of invoices where the goods described as C.R. Sheets instead of H.R. sheets or not manufacturing business of motor vehicle parts. - Held that - appellants are entitled to take cenvat credit on the goods received by them. It is not the allegation that the appellants had procured H.R. Sheets clandestinely without cover of invoice, therefore, the cenvat credit cannot be denied. description of the goods different but the fact is not denied, the appellants received the goods, therefore, the appellants are entitled to take credit. appeal is allowed

Summary

Issues:
Appeal against denial of Cenvat Credit on inputs and imposition of penalty.

Analysis:
The case involved an appeal against an order denying Cenvat Credit on inputs and imposing a penalty equal to the duty amount. The appellants, engaged in manufacturing motor vehicle parts, procured H.R. Sheets but received invoices showing C.R. Sheets. The dispute arose due to the discrepancy in the description of goods on the invoices. The authorities alleged a contravention of Rule 7(1)(a) of the Cenvat Credit Rules, 2004. The appellants argued that despite the discrepancy, they received and used the actual H.R. Sheets in manufacturing, justifying their entitlement to Cenvat Credit.

The appellant's counsel contended that as per Rule 7(1)(a), essential particulars like duty details, taxable service, and registration information were present in the invoices, allowing for Cenvat Credit. The counsel cited precedents where discrepancies in goods description did not preclude credit entitlement. The Revenue, however, argued that the discrepancy indicated a potential mala fide intention to claim inadmissible credit, distinguishing the case from cited precedents.

After hearing both sides, the Tribunal focused on whether the appellants could claim Cenvat Credit based on invoices listing C.R. Sheets instead of the received H.R. Sheets. Despite the mismatch, the Tribunal noted that the appellants legitimately received and utilized the H.R. Sheets in manufacturing. Relying on Rule 7(1)(a) provisions and previous case law, the Tribunal held that the appellants were entitled to the credit as essential invoice details were present, and the goods were genuinely received.

The Tribunal emphasized that the discrepancy in goods description did not negate the actual receipt and use of the goods by the appellants. Notably, the Tribunal referenced a case where a similar discrepancy was resolved in favor of credit availability. As the appellants had received the goods in question, the Tribunal overturned the impugned order, allowing the appeal and granting consequential benefits to the appellants.