2013 (11) TMI 1174 - AT - Central Excise

Denial of Processed fabrics - Invoices are not addressed to the appellant Waiver of Pre-deposit Held that - Consignee s name as to mentioned in the invoice is M/s. Mahaveer Polytex (P) Ltd. Account M/s. Indo British Garments (P) Ltd. and the address of the consignee is the address of the appellant - The name of M/s. Mahaveer Polytex (P) Ltd. had been mentioned, as they are the indenting dealer through whom the appellant had placed the orders with the manufacturers for purchase of fabrics - The various discrepancies in the invoices mentioned in the order, had not been mentioned in the Show Cause Notice - Prima facie view that Commissioner (Appeals) has gone beyond grounds taken in the Show Cause Notice amount of the duty already paid by the appellant is sufficient for hearing of the appeal - the requirement of pre-deposit of balance amount of Cenvat Credit demand, interest and penalty waived till the disposal Stay granted.

Summary

Issues:
1. Availment of Cenvat Credit on certain services
2. Availment of Cenvat Credit on processed fabrics received under specific invoices

Analysis:

*Issue 1: Availment of Cenvat Credit on certain services*

The appellant, a manufacturer of Readymade Garments, availed Cenvat Credit on excise duty paid on inputs and service tax on input services during 2006-2008. The dispute arose over the availment of Cenvat Credit amounting to Rs. 1,38,836 on certain services that the Department deemed non-cenvatable. The appellant reversed this amount before the Show Cause Notice. Another point of contention was the Cenvat Credit of Rs. 2,56,726 on processed fabrics received under 10 invoices. The Department argued that since the invoices were not in the appellant's name but in the name of an indenting dealer, Cenvat Credit could not be claimed based on those invoices. The Additional Commissioner confirmed the Cenvat Credit demands and imposed penalties. The Commissioner (Appeals) upheld this decision, leading to the current appeal.

*Issue 2: Availment of Cenvat Credit on processed fabrics*

During the appeal, the appellant argued that the demand of Rs. 2,56,726 was unsustainable as the credit was based on invoices issued by manufacturers and the indenting dealer. They contended that the consignee's name on the invoices was the indenting dealer, through whom the orders were placed. The appellant had strong evidence, including certificates from manufacturers and the indenting dealer confirming the supply of goods. The Commissioner (Appeals) highlighted discrepancies in the invoices but did not address them in the Show Cause Notice. The Tribunal found that the objection to Cenvat Credit based on the consignee's name not being the appellant was not valid. The invoices clearly indicated the appellant's address, and the indenting dealer was mentioned due to order placement. As discrepancies were not raised in the Show Cause Notice, the Tribunal held that the Commissioner (Appeals) exceeded the grounds of the notice. The Tribunal waived the pre-deposit requirement for the balance amount of Cenvat Credit demand, interest, and penalty, allowing the stay application.

In conclusion, the Tribunal allowed the appeal, finding in favor of the appellant regarding the availment of Cenvat Credit on processed fabrics, as the objections raised were not valid and exceeded the grounds of the Show Cause Notice.