2017 (11) TMI 83 - AT - Central Excise

CENVAT credit - MS platforms which are procured for weighbridge installed by the respondent - denial of credit on the ground that MS platforms which were ordered by the respondents were directly delivered to the site of weighbridge and were not received in the factory premises - Board s Circular No.146/57/95-CX dt. 12/09/1995 - Held that - the assessee has availed CENVAT credit on MS platforms without receipt of inputs to his factory premises thereby contravening the provisions of Rule 4(1) of CCR, 2004. The assessee being the principle manufacturer, the above mentioned circular appears to be not applicable in the instant case. The first appellate authority has appreciated the entire case on its factual matrix which is very evident from paragraph No 6 & 7 of the Order-in-Appeal. Though the first appellate authority may have relied upon the Board s circular which is being contested by the Revenue, the factual matrix of the documents being in the name of the respondent and the weighbridge being installed is for the respondent is not being disputed. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Availment of CENVAT credit on MS platforms procured for weighbridge.
2. Interpretation of Rule 4(1) of CENVAT Credit Rules, 2004.
3. Applicability of Board's Circular No. 146/57/95-CX.
4. Comparison between erstwhile Modvat Credit Rules and CENVAT Credit Rules.

Analysis:

1. The appeal was filed by the Revenue against an Order-in-Appeal regarding the availment of CENVAT credit amounting to ?44,38,233 on MS platforms procured for a weighbridge. The Revenue contended that since the MS platforms were directly delivered to the weighbridge site and not the factory premises, CENVAT credit could not be availed. The adjudicating authority upheld the demands and penalties, but the first appellate authority allowed the CENVAT credit, setting aside the original order.

2. The Revenue argued that the assessee, as the principal manufacturer, contravened Rule 4(1) of the CENVAT Credit Rules, 2004, by availing CENVAT credit on MS platforms without the receipt of inputs at the factory premises. They cited Board's Circular No. 146/57/95-CX, emphasizing that the circular was not applicable in this case due to the specific provision of Rule 4(1) mandating the receipt of inputs in the factory for availing CENVAT credit.

3. The Revenue also referred to judgments of the Supreme Court in Vikram Cement Vs. CCE and Jaypee Rewia Cements Vs. CCE, which were based on the erstwhile Modvat Credit Rules allowing such credits. However, they highlighted that the Modvat Credit Rules had been replaced by the CENVAT Credit Rules from 01/04/2000, which required the inputs to be brought into the factory for availing CENVAT credit under Rule 4(1) of the CENVAT Credit Rules, 2004.

4. The appellate tribunal upheld the first appellate authority's decision, emphasizing that the factual matrix, where the documents were in the respondent's name and the weighbridge was installed for the respondent, was not contested. Despite the Revenue's objections to the circular and legal interpretations, the tribunal found the impugned order to be correct, legal, and free from any infirmity, ultimately rejecting the appeal and upholding the Order-in-Appeal.