2016 (12) TMI 157 - AT - Central Excise

Cenvat credit - duty paying documents - availing of CENVAT credit on the basis of challans and not the bills of entry - suppression of facts - contravention of Rule 9 and Rule 3 of CCR 2004 - Held that - It is not disputed that the inputs on which credit has been taken were imported by the appellants who filed the bill of entry for their warehousing. Due to problems with warehousing period they could not file the ex-bond bill of entry and cleared the goods on payment of custom duty which was duly accepted by customs authorities. The duty payment challans have been signed by the customs officer for Assistant Commissioner of Customs (Bond Department) Nhava Sheva Custom House. Duty payment challans contain material particulars like bill of entry no. description of goods bond no. assessable value duty and interest amount. There is no allegation in the show cause notice that the goods were diverted or were not received in the factory. The goods have been cleared after payment of appropriate duty and proper entries have been made in the RG-23 Part-II register and duty paying challans correlate with the respective entry in RG-23 Part-II register. There is no allegation that the duty paying challans are fake or that the cenvat credit has been taken again on the basis of these challans - Tribunal in the case of CCE Vapi vs. Mehta Hwa Fuh Plastics Pvt Ltd. 2013 (1) TMI 527 - CESTAT AHMEDABAD has held that when the receipt of the inputs and its final use in manufacturing is not disputed then the inputs cannot be denied the cenvat credit. The cenvat credit has been correctly availed by the appellants and the appeal filed by the appellants is allowed - decided in favor of appellant-assessee.

Summary

Issues involved:
1. Availing cenvat credit on the basis of customs duty paid challans instead of bills of entry.
2. Allegation of suppression and imposition of penalty.
3. Barred by limitation - proper declarations made in ER-1 and entries in RG-23 Part-II register.
4. Interpretation of Rule 9 of CCR, 2004 regarding cenvat credit.
5. Application of case laws supporting both parties' arguments.

Detailed Analysis:
1. The appeal was filed against the Commissioner of Central Excise (Appeals), Mumbai Zone-I's order regarding the availing of cenvat credit on customs duty paid challans instead of bills of entry for warehoused imported goods. The department alleged contravention of Rule 9 and Rule 3 of CCR, 2004, demanding duty payment of &8377; 22,91,820 along with interest and penalty for suppression. The appellants argued that the goods were imported in their name, warehoused, and later cleared after the warehousing period expired, paying the duty accepted by customs authorities. The duty payment challans contained necessary details, and there was no diversion of goods. The entries in the RG-23 Part-II register matched the challans, and there was no evidence of fake challans or duplicate credit availing.

2. The Advocate for the appellants cited various case laws to support their argument, emphasizing that the duty paid goods were received and used in the manufacturing process. They contended that the show cause notice was time-barred due to proper declarations in ER-1 and entries in RG-23 Part-II register. The judgments cited by the appellants highlighted instances where credit was allowed when duty payment was not disputed, and goods were received and utilized in manufacturing.

3. The Revenue argued that Rule 9 of CCR, 2004 only allows cenvat credit based on bills of entry, not duty payment challans. They referenced case laws to support their contention that credit cannot be availed on the basis of challans. However, after hearing both parties and examining the records, the Tribunal found that the appellants had correctly availed cenvat credit as the inputs were imported by them, duty was paid and accepted, and there was no dispute regarding the receipt and utilization of goods in manufacturing.

4. The Tribunal relied on previous judgments, including the Hon'ble Punjab & Haryana High Court and the case of CCE, Vapi vs. Mehta Hwa Fuh Plastics Pvt Ltd., to support their decision that when the receipt and final use of inputs in manufacturing are not disputed, cenvat credit cannot be denied. The Tribunal concluded that the appellants were entitled to claim cenvat credit based on the facts of the case and allowed the appeal, rejecting the Revenue's arguments.

5. The Tribunal's decision was based on the application of relevant legal provisions, case laws, and factual findings supporting the appellants' position, ultimately allowing the appeal and holding that the cenvat credit was correctly availed by the appellants.