2017 (2) TMI 533 - AT - Central Excise

Cenvat Credit - duty paying documents - invoices do not contain necessary particulars - Held that - The defect that the credit was taken by invoice issued by Mumbai branch office when goods were imported by importer at Chennai is only a procedural lapse if at all, and can be condoned. The defect that invoices were issued prior to clearances of goods from port is too flimsy and baseless allegation particularly to be raised at the receivers end - Appeal allowed - decided in favor of the assessee.

Summary

Issues:
1. Allegation of improper CENVAT credit taken on dealer invoices.
2. Dispute regarding details on invoices and Bill of Entry.
3. Jurisdictional Commissioner's role in verifying credit before issuing show-cause notice.

Analysis:
1. The appellants were involved in the manufacture of tyres on a job work basis using raw materials supplied by CEAT Ltd. They availed CENVAT credit on duty paid on inputs, including Dipped Nylon Tyre Cord Fabrics imported from M/s. SRF Ltd Mumbai. A show-cause notice alleged improper credit on three dealer invoices due to discrepancies in Bill of Entry details and invoice particulars. The original authority confirmed the demand with penalties, upheld by the Commissioner(Appeals), leading to the current appeal.

2. The appellant's counsel argued that despite discrepancies in Bill of Entry details and invoice particulars, the duty paid was evident, meeting CENVAT credit requirements. Referring to Circular No.441/7/99-CX, it was emphasized that the jurisdictional Commissioner should verify credit eligibility before issuing a show-cause notice. Legal precedents were cited to support the contention that minor defects in invoices do not warrant credit denial. The respondent's representative maintained that the invoices lacked necessary details, justifying credit denial.

3. The Tribunal noted the Circular's mandate for the Commissioner to verify credit eligibility before initiating action. While acknowledging minor discrepancies in Bill of Entry and invoice details, it emphasized that the duty payment was established. Citing legal precedents, the Tribunal concluded that minor procedural lapses, such as branch office issuing invoices or timing of invoice issuance, should not result in credit denial. Consequently, the impugned order was set aside, allowing the appeal with any consequential reliefs.

This detailed analysis highlights the issues surrounding improper CENVAT credit, discrepancies in invoice details, and the Commissioner's role in verifying credit eligibility before issuing show-cause notices, culminating in the Tribunal's decision to allow the appeal.