2018 (1) TMI 470 - AT - Central Excise

CENVAT credit of CVD - case of appellant is that since the duty paid goods were received in the factory for the intended purpose, Cenvat credit cannot be denied on the sole ground that the bill of entry does not reflect the name of the appellant as the consignee - Held that - With regard to the maintainability of the bill of entry for the purpose of taking Cenvat credit, it is found that the said bill of entry does not mention the name of the appellant as the consignee. Thus, technically the appellant was not entitled to take Cenvat credit. However, on fulfilling the other conditions to demonstrate that the subject goods were suffered payment of duty, those were received in the factory for manufacture of the excisable goods, the proviso contained in Rule 9 was required to be invoked in judicious manner by original authority. Tthe goods covered under the bill of entry were received by the appellant in its factory for use in the intended purpose. Therefore, the Cenvat benefit in respect of CVD amount should be available to the appellant. Appeal allowed.

Summary

Issues:
- Disallowance of Cenvat credit on the grounds of bill of entry not being in the name of the appellant
- Appeal against the order disallowing Cenvat credit and imposing penalties

Analysis:

Issue 1: Disallowance of Cenvat credit based on bill of entry details
The appellant, a contract manufacturer for M/s Hindustan Unilever Ltd. (M/s HUL), availed Cenvat credit of Central Excise duty paid on inputs used in manufacturing detergents for M/s HUL. The dispute arose when goods imported by M/s HUL were diverted to the appellant's factory, and the appellant claimed Cenvat credit based on the Central Value Duty (CVD) amount mentioned in the bill of entry. The department disallowed the credit, citing the bill of entry not being in the appellant's name. However, the Tribunal found that the goods were indeed received by the appellant for the intended purpose of manufacturing excisable goods, fulfilling Rule 3 of the Cenvat Credit Rules. Although the bill of entry technically did not mention the appellant as the consignee, the Tribunal held that the procedural condition could be waived under Rule 9 due to the goods being used as intended. The Tribunal concluded that the appellant should be entitled to the Cenvat benefit for the CVD amount.

Issue 2: Appeal against the order disallowing Cenvat credit
The appellant appealed against the order disallowing Cenvat credit and imposing penalties. The appellant's consultant argued that the goods were cleared by M/s HUL directly to the appellant's factory, supported by a certificate from M/s HUL stating the intended use of the goods and confirming that no Cenvat credit would be availed by them. The appellant also provided transport documents showing the delivery of goods to their site. On the other hand, the Revenue contended that only the bill of entry, not an endorsed copy or certificate, should be recognized for Cenvat credit. They raised concerns about the lack of endorsement by M/s HUL on the bill of entry and discrepancies in dates. After considering both arguments and examining the case records, the Tribunal found in favor of the appellant, emphasizing that the goods were received and used as intended, justifying the allowance of Cenvat credit.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal in favor of the appellant, as the procedural conditions for Cenvat credit were deemed to have been met despite the technical discrepancy regarding the consignee details in the bill of entry.