2012 (9) TMI 143 - AT - Central Excise

Denail of CENVAT credit on clearing and forwarding services - no nexus between input services and the final products - Held that - As appellant is engaged in the manufacture of MG craft importing waste paper for the manufacture of final product the services received are in relation to the importation of waste paper such as container charges, handling charges incurred in the port etc. thus it cannot be said that there is no nexus with the final product - in favour of assessee. Invoices are not in the name of the appellant - Held that - As the lower authorities who have simply denied this claim on the ground that the appellant s name was not found in some of the invoices are required to re-examine the issue and allow the credit if the appellant is able to fulfill the requirement of the proviso to Rule 9(2) of Cenvat Credit Rules, 2004 wherein it is mentioned that if invoice does not contain all the particulars but contains the details of service tax payable, description of the service, assessable value, registration number of the service provider, details of the manufacture/first stage dealer/second stage dealer or provider of textile service, the Assistant Commissioner if he is satisfied that services have been received and accounted for can allow the credit - appellant may have to show that the persons whose names appear in the invoices have not availed cenvat credit so that availment of credit by more than one person can be avoided - issue remanded back to decide afresh.

Summary

Issues:
1. Denial of Cenvat credit on service tax paid on clearing and forwarding services due to issues with invoices.
2. Lack of nexus between input services and final product manufactured by the appellant.
3. Requirement of appellant's name on invoices for claiming Cenvat credit.
4. Interpretation of the proviso to Rule 9(2) of Cenvat Credit Rules, 2004.
5. Need for re-examination by lower authorities and remand for fresh adjudication.

Analysis:
1. The appellant's Cenvat credit on service tax paid was denied based on issues with invoices, such as overwriting and lack of appellant's name. However, the judge found that the services received, related to the importation of waste paper for manufacturing the final product, establish a nexus between input services and the final product. Hence, the denial of credit based on the lack of nexus was deemed unacceptable.

2. Regarding the absence of the appellant's name on invoices, the judge noted that the proviso to Rule 9(2) of Cenvat Credit Rules, 2004 allows for credit if certain details are provided, even if the appellant's name is missing. The lower authorities were directed to re-examine the issue and allow credit if the appellant fulfills the proviso's requirements. The judge emphasized the importance of verifying the necessary particulars before denying credit, as per the spirit of the rule.

3. The judge highlighted that the lower authorities had not considered the proviso's requirements adequately, leading to the denial of credit based solely on the absence of the appellant's name on some invoices. The judge emphasized the need for proper verification and consideration of all relevant details before rejecting the appellant's claim for Cenvat credit.

4. The matter was remanded to the original adjudicating authority for a fresh examination in light of the discussions and to provide the appellant with a reasonable opportunity to present their case. The impugned order was set aside, and the case was sent back for re-evaluation, ensuring a fair adjudication process and consideration of all relevant factors for claiming Cenvat credit.