2016 (8) TMI 586 - AT - Central Excise

Cenvat credit - import of raw materials - appellant s present name not mentioned in bills of entry - Held that - it is clear that at the time of import, the bills were filed in the name of the company as existing at that time. The change of names have been effected, and there is no dispute on that count. I find the reason followed by the lower authorities is devoid of any merit. The goods have been imported by the appellant and have been used for intended purpose. The reason for denial is not legally sustainable. Regarding the 7th bill of entry also, I find the raw materials imported have been transferred in full to the appellant under due certification by the importer. The raw materials have been used by the appellant for manufacture on behalf of the supplier under loan licence basis. Therefore, I find no justification for denial of credit. - Decided in favour of appellant

Summary

Issues involved:
- Denial of cenvat credit on imported raw materials based on bills of entry.
- Appellant's name not matching in bills of entry.
- Change of company name and its legal implications.
- Transfer of imported goods to appellant under loan license basis.
- Legal basis for denial of credit by lower authorities.

Analysis:
The case involved an appeal against the order of the Commissioner of Central Excise, Indore, regarding the denial of cenvat credit on imported raw materials covered by 7 bills of entry. The appellant had availed credit on these imports during the period 2006-2010. The denial was primarily based on the discrepancy in the name of the importer mentioned in the bills of entry and the appellant's current name. The appellant had undergone name changes, which were duly approved by competent authorities. The appellant argued that the denial of credit solely on the basis of the name mismatch was arbitrary and lacked legal basis. The lower authority's reasoning was challenged as the central excise registration continued despite the name changes, and the raw materials were used for the intended purpose.

Regarding six bills of entry, where the name discrepancy existed, the appellant's counsel highlighted the name changes from Nicholas Piramal India Ltd. to Piramal Health Care Ltd. and then to Piramal Enterprises Ltd. The appellant had used the imported raw materials for manufacturing final products, and the denial of credit based on the name mismatch was deemed unjustified. Additionally, for the remaining bill of entry, where the import was made by another entity and transferred to the appellant under a loan license basis, the goods were used for manufacturing as per the agreement, and the denial of credit was considered unwarranted.

The Appellate Tribunal, after hearing both parties and examining the appeal records, concluded that the denial of credit solely based on the appellant's name not matching in the bills of entry was without merit. The Tribunal referenced legal precedents, such as the judgment of the Hon'ble Bombay High Court in Marmagoa Steel Ltd. Vs. Union of India, to support the principle that credit cannot be denied when duty-paid goods are used as inputs, irrespective of the endorsement on the bill of entry. The Tribunal also cited the case of Raheja Plastics Vs. CCE, Mumbai-V, to emphasize that cenvat credit based on bills of entry with the principal manufacturer's name cannot be refused.

In light of the above analysis and legal precedents, the Tribunal found the lower authority's order unsustainable and set it aside, allowing the appeal in favor of the appellant.