2017 (12) TMI 820 - AT - Central Excise

CENVAT credit of additional duty (GSI) - the department is that the dealer is not authorized to issue supplementary invoice, the AED (GSI) passed on the basis of supplementary invoice is not admissible to the appellant - Held that - As per the fact of the case which is not under dispute that sugar purchased by the appellant has suffered AED (GSI) as the same was admitted by the lower authorities, the sugar sold by the dealer is duly duty paid including AED (GSI) - In the present case, as an additional precaution the dealer have issued supplementary invoice in respect of AED (GSI) showing the cross reference of the original dealer invoice - there is no reason why credit of GSI should not be allowed to the appellant - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Availability of CENVAT credit for Additional Excise Duty (GSI) passed on through supplementary invoice
- Dispute regarding the authorization of the dealer to issue supplementary invoice under Rule 7(1)(b) of CENVAT Credit Rules, 2001

Analysis:
The case involved a dispute regarding the availability of CENVAT credit for Additional Excise Duty (GSI) passed on through a supplementary invoice. The appellant, a manufacturer of aerated water, received sugar from registered dealers during a specific period. The CENVAT Credit Rules were amended in 2003, allowing for retrospective availment of credit for Additional Excise Duty (GSI) accrued before 01.03.2003. The appellant availed the credit based on a supplementary invoice issued by the dealer, which the department contended was not admissible as the dealer was not authorized to issue such invoices.

The appellant argued that the Additional Excise Duty (GSI) had already been passed on to them through the initial invoice, albeit not separately shown. They contended that the retrospective allowance of credit in 2003 validated their claim. The appellant also cited a judgment of the Delhi High Court in a similar case to support their position. On the other hand, the Revenue reiterated the findings of the impugned order, denying the credit based on the supplementary invoice.

The tribunal, after considering both sides' submissions, noted that the appellant was entitled to the CENVAT credit for the Additional Excise Duty (GSI) accrued before 01.03.2003 as per the Budget 2003 amendment. The denial of credit by lower authorities was primarily due to the use of a supplementary invoice, which was not explicitly allowed under Rule 7(1)(b) of the CENVAT Credit Rules, 2001. However, the tribunal found that the sugar purchased by the appellant had indeed incurred the Additional Excise Duty (GSI), acknowledged by the lower authorities.

The tribunal observed that the total duty mentioned in the dealer invoice included the Additional Excise Duty (GSI), even though not separately shown. Given that the dealer issued a supplementary invoice as an additional precaution to reflect the GSI component, the tribunal ruled in favor of the appellant. Citing a judgment of the Delhi High Court in a similar case, the tribunal held that the appellant was entitled to the CENVAT credit, even based on the original invoice, as the GSI element was included in the total duty. Therefore, the tribunal allowed the appeal in favor of the appellant, emphasizing the validity of the credit claim.

In conclusion, the tribunal's decision highlighted the retrospective entitlement of CENVAT credit for Additional Excise Duty (GSI) and emphasized the inclusion of the duty component in the total invoice amount, ultimately ruling in favor of the appellant's claim for credit.