2013 (11) TMI 1157 - AT - Central Excise

Denial of Cenvat credit - Non-endorsement of Bills in the favour of Appellant - Requirements under Rule 9 of Central excise rules - Waiver of Pre-deposit Held that - The bills of entry filed in the name of M/s. Johnson Matthey Chemical India (P) Ltd. as importer of the capital goods, are not endorsed in the name of the appellant, the address of the consignee is the same as the address of the appellant - The emphasis in the show cause notice is that the bills of entry are not endorsed in favor of the appellant - In Rule 9 of the Cenvat Credit Rules also one of the valid documents for availment of cenvat credit is bill of entry - as such, there is no provision that bill of entry should be endorsed in the name of the manufacturer taking the cenvat credit - so long as there is no dispute that the goods covered under a bill of entry have been received by a manufacturer, it would not be correct to deny the cenvat credit Prima facie the appellant have a case in their favour - The requirement of pre-deposit of cenvat credit demand, interest and penalty waived till the disposal stay granted.

Summary

Issues:
Cenvat credit availed on capital goods not endorsed in favor of the appellant, Jurisdictional Asstt. Commissioner's order confirming cenvat credit demand, Commissioner (Appeals) upholding the order, Stay application filed against the order.

Analysis:
The appellant, a manufacturer of Catalyst and Chemicals, availed cenvat credit amounting to Rs.4,82,840/- on capital goods imported by M/s. Johnson Matthey Chemical India (P) Ltd. The department objected to this credit, citing that the bills of entry were not endorsed in favor of the appellant. The jurisdictional Asstt. Commissioner confirmed the cenvat credit demand, imposed interest, and penalty. On appeal, the Commissioner (Appeals) upheld the decision, leading to the current appeal and stay application.

During the hearing, the appellant's counsel argued that the bills of entry clearly showed the consignee's address as the appellant's, the receipt of goods was not disputed, and the cenvat credit was duly declared in the ER-I Returns. The appellant contended that the mere absence of endorsement on bills of entry should not be a reason to deny the credit, citing precedents where similar situations were granted a stay. The departmental representative opposed the stay, emphasizing the lack of evidence regarding the receipt of goods and the appellant's failure to establish a strong prima facie case.

Upon reviewing the submissions and records, the judge noted that while the bills of entry were not endorsed in the appellant's name, the consignee's address matched the appellant's. The judge highlighted that the show cause notice did not dispute the receipt of goods but focused on the endorsement issue. Referring to Rule 9 of the Cenvat Credit Rules, the judge observed that as long as the goods covered by a bill of entry are received by the manufacturer, denial of cenvat credit solely based on endorsement absence would be incorrect. Consequently, the judge found that the appellant had a prima facie case in their favor and waived the pre-deposit requirement for cenvat credit demand, interest, and penalty, staying the recovery until the appeal's disposal.