2008 (7) TMI 243 - AT - Central Excise

Shifting of factory revenue denied credit on ground that invoices have not been endorsed in the name of new unit - Merely because the D3 intimation was not filed revenue is not justified in drawing presumption that the goods were not in the original packed condition - once there is no allegation that the inputs have not been received and used in the manufacture the credit cannot be denied - Endorsement is only a formality which has to be undertaken by them only & not by a third agency

Summary

Issues:
1. Denial of credit on invoices due to lack of endorsement for factory shifting.
2. Requirement of intimation regarding receipt of inputs in original packed condition.

Analysis:
The case involved a dispute where the appellants shifted their factory from Pimpri to Chakan and duly informed the department about the relocation. During the transitional period, they received inputs at the new Chakan unit but with invoices indicating the old Pimpri factory address. The department denied credit on these invoices citing lack of endorsement for the new unit and non-filing of intimation regarding the condition of received inputs. The appellant contended that since the inputs were received and used in manufacturing, credit should not be denied, referencing previous tribunal decisions supporting their stance.

The Departmental Representative (DR) argued that invoice endorsement is a mandatory requirement and cannot be overlooked. Additionally, the adjudicating authority found no intimation regarding the condition of received inputs, further supporting the denial of credit.

Upon review, the Member (T) noted that the department was informed about the factory shift, and there was no dispute on that aspect. The dispute was limited to four invoices totaling Rs. 22,025, a small fraction compared to the overall credit amount of Rs. 5 crores availed by the appellants. Importantly, there was no allegation that the credit was wrongly claimed by the old unit. The absence of D3 intimation did not prove that the goods were not in original packed condition, especially when there was no dispute about the receipt and use of inputs in manufacturing. The Member emphasized that endorsement on invoices is a procedural formality to be completed by the appellants themselves, not a third party. Consequently, the appeal was allowed, and the Commissioner's order was set aside.

In conclusion, the judgment clarified that the denial of credit solely based on invoice endorsement and lack of intimation was unjustified when the receipt and utilization of inputs were not in question. The decision underscored the importance of procedural compliance by the appellants and highlighted that such formalities should not impede legitimate credit claims when the substance of the transactions is clear.