2017 (10) TMI 963 - AT - Central Excise

CENVAT credit - duty paying invoices - credit taken on the basis of photocopy of the courier bill of entry - Held that - in case of Union of India vs. Hira Steels Ltd 2010 (9) TMI 867 - CHHATTISGARH HIGH COURT , Cenvat credit taken on photocopies has been held to be valid, as there is no dispute regarding the receipt of duty paid inputs under such invoices and their use in the manufacture of finished goods cleared on payment of duty - credit allowed. CENVAT credit - capital goods - 100% credit taken in the first year of acquisition - Held that - originally when the machinery was acquired in their factory, they had taken only 50% of the credit in the year of receipt and the balance 50% was taken only in the next financial year - further, the credit was taken but not utilised - relying upon the decision of the Karnataka High Court in the case of Commissioner vs. Bill Forge PVt. Ltd. 2011 (4) TMI 969 - KARNATAKA HIGH COURT , the appellant are not liable to pay interest and penalty. CENVAT credit - duty paying documents - input services - denial on the ground that in the bill, service tax registration is not mentioned and further some of the bills are not in the prescribed format - Held that - excepting the service tax registration number all other details have been given in the bills - even certificate of service tax registration has also been placed on record which shows that the service provider had the service tax registration at the time when the input service was provided to the appellant - reliance placed in the case of Commissioner Vs. Techno Vision 2006 (7) TMI 556 - CESTAT, MUMBAI , it has been held that if the transaction is bonafide, credit could not be denied even if duty paying documents are invalid Rule 9 of Cenvat Credit Rules 2004. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Appeal against rejection of appellant's appeal by Commissioner
- Allegations of contravention of Cenvat Credit Rules
- Availing excess credit on capital goods
- Taking credit on investment casting dies
- Availing credit on photocopies of invoices
- Denial of credit on input services
- Validity of documents for availing Cenvat credit

Analysis:
The appeal was filed against the rejection of the appellant's appeal by the Commissioner, who alleged contravention of Cenvat Credit Rules. The appellant, a manufacturer of industrial control valves, faced accusations regarding availing excess credit on capital goods, specifically 100% credit instead of the prescribed 50%. Additionally, they were charged with taking credit on investment casting dies and photocopies of invoices, contrary to the rules. The appellant argued that they had acquired a nearby factory due to expansion, leading to a single registration for both units. They claimed that machinery credits were taken as per regulations, and any discrepancies were due to oversight. The appellant also defended the photocopy-based credits, citing legal precedents supporting their claim.

The Learned AR supported the impugned order's findings, emphasizing the alleged violations of Cenvat Credit Rules by the appellant. However, after considering both parties' submissions, the judicial member found in favor of the appellant on several grounds. Firstly, regarding photocopy-based credits, citing a legal precedent, it was established that such credits were valid if no dispute existed about the receipt and utilization of duty-paid inputs. Secondly, concerning the allegation of availing 100% credit on capital goods, the appellant's submission of taking 50% initially and the balance later was accepted. Relying on judicial decisions, it was concluded that the appellant was not liable for interest and penalties. Lastly, regarding denied credit on input services due to technicalities in the bills, the member noted that all essential details were present, and the service provider's valid service tax registration was available, justifying the credit claim.

By applying the principles established in various legal cases, the judicial member deemed the impugned order unsustainable under the law. Consequently, the order was set aside, allowing the appeal of the appellant with any consequential relief. The comprehensive analysis of the issues involved in the judgment showcases the meticulous consideration of facts, legal precedents, and regulatory compliance, leading to a favorable outcome for the appellant.