2017 (7) TMI 884 - AT - Central Excise

CENVAT credit - furnace oil - duty paying invoices - Held that - the appellant has rightly availed the credit as per the invoices issued by M/s. BPCL and therefore, the Department cannot question the CENVAT credit availed by the appellant on the basis of valid invoices issued by the supplier - reliance placed in the case of COMMISSIONER OF C. EX., DELHI-II Versus RS. INDUSTRIES 2005 (7) TMI 117 - HIGH COURT OF DELHI - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Appeal against rejection of CENVAT credit on furnace oil
- Contravention of CCR, 2004
- Demand for reversal of excess availed credit
- Imposition of penalty under Rule 15(2) of CCR, 2004
- Applicability of Board Circular No.766/82/2003-CX
- Time bar on the demand
- Validity of invoices issued by the supplier
- Binding nature of CBEC Circulars

Analysis:
The appeal was filed against the rejection of CENVAT credit on furnace oil by the Commissioner (A). The appellant, a manufacturer of excisable goods, availed excess CENVAT credit due to discrepancies in the credit passed on by the supplier, M/s. BPCL. The adjudicating authority issued a show-cause notice demanding reversal of the excess credit, interest, and penalty under Rule 15(2) of CCR, 2004. The appellant contended that the inputs were received and used in manufacturing, and reliance was placed on Board Circular No.766/82/2003-CX. The Commissioner (A) rejected the appeal, leading to the present appeal.

The appellant argued that the impugned order was contrary to Board Circulars and previous tribunal judgments on similar issues. It was claimed that the credit was rightfully availed based on valid invoices from the supplier, M/s. BPCL. Additionally, the appellant contended that the demand was time-barred, and no justification was provided for invoking the extended limitation period. Various tribunal decisions were cited in support of the appellant's position, emphasizing the binding nature of CBEC Circulars on the department.

In response, the learned AR supported the findings of the impugned order. After hearing both parties and considering the submissions along with the cited judgments, the judicial member concluded that the issue favored the appellant based on the precedents referenced. Consequently, the appeal was allowed, setting aside the impugned order and providing any necessary consequential relief. The operative portion of the order was pronounced in open court on 13/06/2017.