2014 (3) TMI 239 - AT - Central Excise

Denial of the benefit of Cenvat credit in respect of roll bearings - Requisite particulars not mentioned in invoices - Held that - There is no dispute about the receipt of the goods by the appellants under the cover of invoices and on payment as regards payment of duty - I have seen the invoices wherein the total duty paid by the supplier of the goods stand duly mentioned. On an objection raised by the department, an additional certificate stand given by their sister unit giving only details. The defects pointed out by the Revenue are rectifiable defects and stand rectified by the appellants, in which case the benefit of Cenvat credit and could not be denied to them - Decided in favour of assessee.

Summary

Issues:
- Denial of Cenvat credit on roll bearings
- Disallowance of credit on lubricants and grease
- Disallowance of credit on certain capital goods
- Disallowance of credit on heat tracer
- Disallowance of credit on hose assembly and V-belts
- Dispute over invoice details leading to denial of credit

Denial of Cenvat credit on roll bearings:
The Commissioner (Appeals) upheld the denial of Modvat credit on roller bearings transferred from the appellant's Jhansi Unit due to alleged incomplete details in the invoice. The appellant failed to clarify the discrepancies, resulting in the disallowance of credit amounting to Rs. 1,47,519/-.

Disallowance of credit on lubricants and grease:
Corrigendum notices were issued disallowing credit on lubricants and grease used in dumpers, DG sets, and ropeway systems on the grounds that these items were not considered capital goods. The electricity generated was supplied to adjacent units and residential colonies. The credit was proposed to be denied on grinding media as well.

Disallowance of credit on certain capital goods:
The Joint Commissioner held that certain items like V-belts, spares, and drill compressors used in mines were inadmissible for credit as they were used in mining operations outside the factory premises. The disallowance was part of the total demand covered in the show cause notices issued.

Disallowance of credit on heat tracer:
The Commissioner (Appeals) found the denial of Modvat credit on heat tracer by the adjudicating authority unjustified. Heat tracer was considered admissible as it was used as a component, spares, or accessories of DG sets within the factory of production.

Disallowance of credit on hose assembly and V-belts:
The Commissioner (Appeals) disallowed Modvat credit on hose assembly, considering them as parts of material handling equipment not falling under the definition of capital goods. However, the credit on 'V' belts was held to be admissible to the appellant.

Dispute over invoice details leading to denial of credit:
The appellate authority denied credit based on incomplete details in the invoices, despite the supplier providing all necessary information through a certificate issued by their sister unit. The lower authorities did not accept this certificate. However, upon review, the defects in the invoices were found to be rectifiable, and the benefit of Cenvat credit could not be denied to the appellants. Consequently, the appeal was allowed with consequential relief granted to the appellants.