2015 (6) TMI 536 - AT - Central Excise

Denial of CENVAT Credit - Whether appellant is entitled to take Cenvat credit on the invoices issued by the first stage dealer for the period 10.10.2000 to 7.3.2003, after 1st March, 2003 all AED paid during the period 10.10.2000 to 7.3.2003 or not in the facts and circumstances of this case - Held that - If both are taken together there is no allegation against the appellant that appellant cannot take the Cenvat credit on the supplementary invoices by the first stage dealer after 1.3.2003 or not. Further I find that the dispute of availment of AED paid prior to the period 1.3.2003 and same issue was before the Hon ble High Court of Delhi in appellants own case wherein the period was 1.4.2000 to 9.10.2000 i.e. prior to 1.3.2003. In that case in the remand proceedings, learned Commissioner (Appeals) has held that invoices issued by the first stage dealer for payment of AED, the appellant is entitled to take Cenvat credit. The CBEC circular clarifies the same that if AED has been paid prior to 1.3.2003, same can be utilized for the payment of subsequent period after 1.3.2003. - following the decision of the Hon ble High Court of Delhi in appellants own case cited 2010 (9) TMI 136 - DELHI HIGH COURT , I hold that appellant has correctly taken the Cenvat credit - Decided in favour of assessee.

Summary

Issues:
- Denial of Cenvat credit on Additional duty of Excise paid during a specific period.
- Validity of availing Cenvat credit based on invoices from the first stage dealer.
- Interpretation of CBEC circular regarding the utilization of Cenvat credit.

Analysis:
The appellant appealed against the denial of Cenvat credit on Additional duty of Excise paid from 10.10.2000 to 7.3.2003. The appellant, a manufacturer of aerated water, procured sugar during this period from a first stage dealer who did not issue invoices indicating the levy of Additional duty of Excise. Subsequently, a circular allowed Cenvat credit on Additional duty of Excise paid before 1.3.2003. The show cause notice alleged that the appellant could not avail credit for duty paid before 1.3.2003. The dispute centered on whether the appellant could claim Cenvat credit based on the supplementary invoices from the first stage dealer post-1.3.2003.

The appellant argued that they were entitled to take Cenvat credit based on a High Court decision in their favor for a subsequent period. They contended that the denial of credit in the impugned order was not consistent with the show cause notice's allegations. The appellant cited a remand proceeding where Cenvat credit based on supplementary invoices was allowed. The appellant's position was supported by the CBEC circular permitting the utilization of duty paid pre-1.3.2003 for subsequent periods. The appellant's entitlement to the credit hinged on the proper interpretation of the show cause notice and the application of the High Court's decision in their favor.

The opposing argument contended that the show cause notice explicitly stated that the supplementary invoices were not valid for claiming Cenvat credit. It was emphasized that the rules applicable to the appellant's case were not relevant to the cited High Court decision. The opposing party maintained that the appellant's claim based on the supplementary invoices was incorrect and referred to a Supreme Court ruling to support their stance. The opposing party's position rested on the assertion that the rules applicable to the appellant's case did not align with those in the precedent cited by the appellant.

After hearing both sides, the judge analyzed the show cause notice and addendum, finding that the allegations did not preclude the appellant from availing Cenvat credit based on the supplementary invoices post-1.3.2003. The judge referenced the High Court decision in the appellant's favor for a prior period, indicating that such credit utilization was permissible. The judge concluded that the appellant had correctly availed the Cenvat credit and set aside the impugned order. The decision was based on the proper interpretation of the show cause notice, the High Court's precedent, and the CBEC circular, ultimately allowing the appeal and granting consequential relief to the appellant.