2018 (4) TMI 1084 - AT - Central Excise

CENVAT credit - supplementary invoices - Rule 9(1)(b) of Cenvat Credit Rules, 2004 - Held that - the present proceedings have been initiated by way of sequel to the proceedings initiated at Pondicherry in the case of RK Industries and Hindustan Unilever Ltd. As the proceedings at the end of RK Industries and Hindustan Unilever Ltd. stands settled, the allegations against this appellant also do not stand as to any irregularity in taking of Cenvat credit - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Contravention of Rule 9(1)(b) of Cenvat Credit Rules, 2004 by appellant regarding wrong Cenvat credit.
2. Disallowance of Cenvat credit and imposition of penalty under Rule 15 of CCR, 2004.
3. Appeal against the rejection of the appeal by Id. Commissioner (Appeals).
4. Allegations against the appellant in relation to RK Industries and Hindustan Unilever Ltd.
5. Irregularity in taking Cenvat credit by the appellant.

Analysis:

1. The main issue in this appeal was whether the appellant, a detergent manufacturer registered with the Department, contravened Rule 9(1)(b) of Cenvat Credit Rules, 2004 by taking wrong Cenvat credit based on a supplementary invoice issued by M/s R.K. Industries, Pondicherry. The appellant had taken Cenvat credit on this invoice, which led to the disallowance of credit and imposition of a penalty under Rule 15 of CCR, 2004.

2. The appellant, aggrieved by the rejection of the appeal by the Id. Commissioner (Appeals), approached the Tribunal. It was highlighted that similar allegations were made against M/s RKI and Hindustan Unilever Ltd., and the matter was previously adjudicated by the Chennai Bench of the Tribunal. In the previous case, it was noted that the demand of duty and interest was not contested, and penalties were set aside based on certain considerations regarding undervaluation and payment of duty.

3. The Tribunal, after considering the arguments, found that the present proceedings against the appellant were initiated as a sequel to the proceedings against RK Industries and Hindustan Unilever Ltd., which were settled in a previous final order of the Tribunal. Consequently, the Tribunal held that there was no irregularity in the appellant taking Cenvat credit based on the supplementary invoice, and the appellant was entitled to the credit. The appeal was allowed with consequential benefits to the appellant.

4. The learned A.R. for Revenue relied on the impugned order, but the Tribunal, after considering the rival contentions, concluded that there was no irregularity in the appellant's actions regarding the Cenvat credit. The Tribunal's decision was based on the settlement of proceedings involving RK Industries and Hindustan Unilever Ltd., which had a direct impact on the present case.

In conclusion, the Tribunal allowed the appeal, determining that the appellant was entitled to take the Cenvat credit under dispute, as there was no irregularity in the process.