2016 (4) TMI 884 - AT - Central Excise

Denial of Cenvat credit - Availed in respect of differential duty paid on the amortization cost of the cylinders used for supply of wrappers - Supplementary invoice issued in respect of supply of wrapper - Held that - supplementary invoice is only for the value and duty difference in respect of the wrappers which were already supplied to the appellant. Therefore it is not correct to say that no goods were supplied under the supplementary invoice. The differential value is in respect of wrappers and not related to any other transaction. Therefore, the supplementary invoice issued and duty paid therein is indeed in respect of goods i.e. wrappers supplied to the appellant. Hence, the appellant is legally entitled for the Cenvat credit on the supplementary invoice. - Decided in favour of appellant

Summary

Issues:
1. Denial of Cenvat Credit on supplementary invoice for amortization cost of cylinders used for printing wrappers.

Analysis:
The appeals were filed against the Order-in-Appeal rejecting the appellants' claims and upholding the Order-in-Original. The appellants, engaged in biscuit manufacturing, availed Cenvat Credit on printed wrappers used for packing biscuits. The issue arose when the supplier issued a supplementary invoice for excise duty on the amortization cost of cylinders used for printing the wrappers. The lower authority denied the credit stating that no goods were supplied under the supplementary invoice.

The appellant argued that the supplementary invoice was issued only for the differential duty related to the amortization cost of cylinders used for the supplied wrappers. The appellant contended that the credit should be allowed as the supplementary invoice was directly linked to the value and duty difference of the goods supplied. On the contrary, the Revenue reiterated the findings of the impugned order.

After considering both sides' submissions and reviewing the records, the Member (J) found that the disputed Cenvat Credit was for the differential duty on the cylinders used for the supplied wrappers. It was clarified that the supplementary invoice was specifically for the value and duty difference of the already supplied wrappers, making it incorrect to claim that no goods were provided under the supplementary invoice. The Member (J) concluded that the differential value pertained to the wrappers and was not associated with any other transaction. Therefore, the Member (J) held that the supplementary invoice and the duty paid were indeed in connection with the goods, i.e., the wrappers supplied to the appellant. Consequently, the impugned orders were set aside, and the appeals were allowed.