2012 (6) TMI 671 - AT - Central Excise

Availment of cenvat credit on the basis of bill of entry, which is in the name of another unit of the appellant applicability of provisions of Rule 9 (2) Held that - In the case of BHEL vs. CCE, Bhopal 2011 (7) TMI 974 (Tri) it has been decided that just because the bill of entry is in the name of another unit of the same Company and the other unit did not endorse in the bill of entry, credit cannot be denied - as regards applicability of Rule 9 (2) of Cenvat Credit Rules, 2002 except for importer s name, address and registration number which are required to be mentioned in the bill of entry when the goods are diverted, rest of the particulars were available. Difference in description and quantity between bill of entry and Lorry Receipt(LR) Held that - Assessee s explanation is acceptable that Phenol s weight has increased due to addition of water since it cannot be transported as such as there is no indication that investigation or verification was made to see whether the goods received by the appellant was not Phenol at all against revenue.

Summary

Issues:
1. Wrongly availed Cenvat credit on capital goods based on an invalid document.
2. Applicability of Rule 9(2) of Cenvat Credit Rules, 2002 for allowing credit based on a bill of entry in the name of another unit.
3. Discrepancy in description and quantity between bill of entry and Lorry Receipt (LR).

Analysis:
1. The appellant took Cenvat credit on capital goods using a Bill of Entry not in their name, leading to a show cause notice for recovery of the amount. The adjudicating authority confirmed the wrongly availed credit, along with interest and a penalty under Rule 15(2) of Cenvat Credit Rules, 2004 read with Section 11AC of Central Excise Act, 1944. The appeal against this decision was rejected, prompting the current appeal.

2. The main issue revolved around the interpretation of Rule 9(2) of Cenvat Credit Rules, 2002 concerning the allowance of credit based on a bill of entry in the name of another unit of the appellant. The appellant argued that the goods were received only at one unit, not both, and relied on a Tribunal decision to support their case. The appellant contended that the show cause notice did not include the discrepancy in description and quantity between the bill of entry and LR, emphasizing that the explanation for the excess quantity received was reasonable.

3. Regarding the discrepancy in description and quantity, it was highlighted that the appellant had imported a different quantity of Phenol compared to what was shown in the LR and other documents. The appellant explained that the weight difference was due to the addition of water during transportation. The Tribunal found the appellant's explanation reasonable and noted the absence of verification to confirm the goods received were not Phenol. Consequently, the appeal was allowed, setting aside the impugned order, and the stay petition was disposed of accordingly.