2016 (9) TMI 184 - AT - Central Excise

Availment of modvat/cenvat credit - duty paid on various inputs on the basis of the supplementary invoices raised by the suppliers - supplementary invoices/57E certificates were never considered as valid duty paying documents during the period 1.4.2000 to 29.8.2000 - Held that - it is undisputed that the supplementary invoices/57E certificates were issued by the concerned range authorities in respect of discharge of duty liability of goods which were already dispatched from the factory of the supplier and the supplementary invoices were raised to pay the differential duty due to either finalization of their provisional assessment or due to payment of amount by the appellant to the supplier as per the price escalation clauses. The appellant was correct in stating that the Notification 51/2000-CE(NT) is clarificatory in nature inasmuch, prior to 1.4.2000, cenvat credit was available on the supplementary invoices raised by the supplier as also on the 57E certificates. It is well settled law that cenvat credit is a beneficial legislation, hence the benefit which is due to the appellant should not be curtailed due to want/error of the drafting in legislation. It is found that this error of eligibility to avail cenvat credit on the 57E certificates/supplementary invoices was rectified by issuance of Notification 51/2000-CE(NT) on 29.8.2000 which was considered by the Tribunal in the case of Eicher Ltd. vs. CCE, Chennai 2003 (7) TMI 113 - CESTAT, CHENNAI . So, by following the sae, the impugned order is set aside - Decided in favour of appellant with consequential relief

Summary

Issues:
1. Availment of modvat/cenvat credit of duty paid on various inputs based on supplementary invoices.
2. Interpretation of Notification No.51/2000-CE(NT) regarding eligibility of documents for availing cenvat credit.
3. Rectification of drafting error in legislation affecting cenvat credit on supplementary invoices.
4. Comparison with previous judgments regarding the clarificatory nature of Notification No.51/2000-CE(NT).

Detailed Analysis:
1. The primary issue in this case revolved around the appellant's availment of modvat/cenvat credit of duty paid on various inputs based on supplementary invoices raised by suppliers from 1.4.2000 to 29.8.2000. The Revenue contended that these supplementary invoices were not considered valid duty paying documents during this period, leading to a demand for reversal of cenvat credit along with penalties.

2. The appellant argued that the omission of supplementary invoices and 57E certificates as eligible documents for cenvat credit was an error, citing Notification No.51/2000-CE(NT) dated 29.8.2000, which explicitly allowed supplementary invoices for availing cenvat credit. Despite the appellant's defense, the adjudicating authority upheld the demand for reversal of cenvat credit, interest, and penalties.

3. The appellant's counsel highlighted that cenvat credit was available on supplementary invoices both before and after the disputed period, emphasizing that there was no violation of conditions in this case. The counsel argued that the amendment to Rule 57AE of the Central Excise Rules was clarificatory and that the drafting error regarding eligible documents for cenvat credit was rectified by Notification No.51/2000-CE(NT) dated 29.8.2000.

4. The Tribunal analyzed previous judgments, including the case of Eicher Ltd. vs. CCE, Chennai, which held that Notification No.51/2000-CE(NT) was clarificatory in nature and allowed cenvat credit on supplementary invoices during the period in question. The Tribunal further compared this interpretation with the Madras High Court judgment and the view that the notification had retrospective and clarificatory effects, supporting the appellant's claim for cenvat credit on supplementary invoices.

5. Ultimately, the Tribunal found in favor of the appellant, concluding that the issue was squarely covered in their favor by the previous judgments and the clarificatory nature of Notification No.51/2000-CE(NT). As a result, the impugned order was set aside, and the appeal was allowed with any consequential relief deemed necessary.