2018 (7) TMI 1279 - AT - Central Excise

CENVAT Credit - duty paying documents - Supplementary Invoices - Rule 9 (1) (b) of the Cenvat Credit Rules 2004 - Held that - In an identical set of facts in the case of Birla Corporation Ltd. V/s Commissioner 2018 (7) TMI 1264 - CESTAT NEW DELHI , Tribunal allowed the Cenvat Credit holding that there cannot be suppression of fact when the issue of liability of payment of Excise duty at the end of the coal companies was a debatable issue which is pending adjudication in the Apex Court - appeal allowed.

Summary

Issues involved:
- Entitlement to Cenvat Credit based on supplementary invoices issued by coal companies.
- Applicability of Rule 9(1)(b) of the Cenvat Credit Rules 2004.
- Allegations of fraud, suppression, and willful misstatement against coal companies.
- Comparison with a similar case involving Birla Corporation Ltd.

Analysis:

Issue 1: Entitlement to Cenvat Credit based on supplementary invoices
The appeals were filed against orders denying Cenvat Credit availed on the basis of supplementary invoices issued by coal companies. The dispute arose due to differential excise duty paid by the coal companies, including elements like Royalty, Stowing excise duty, and Clean Energy Cess. The Department contended that Rule 9(1)(b) of the Cenvat Credit Rules 2004 prohibits availing credit through supplementary invoices if duty became recoverable due to willful misstatement or suppression of facts. The core issue was whether the appellants were entitled to Cenvat Credit based on these supplementary invoices.

Issue 2: Applicability of Rule 9(1)(b) of the Cenvat Credit Rules
Rule 9(1)(b) of the Cenvat Credit Rules 2004 was central to the dispute. This rule states that supplementary invoices cannot be used as duty paying documents for availing credit if additional duty became recoverable from the manufacturer due to willful misstatement or suppression of facts. The Revenue justified the denial of credit based on this rule, arguing that proceedings against the coal companies for alleged suppression rendered the supplementary invoices invalid for credit purposes.

Issue 3: Allegations against coal companies and comparison with Birla Corporation case
The appellants argued that the allegations of fraud and suppression against the coal companies were debatable, as the issues were subjudice before the Apex Court. Reference was made to a case involving Birla Corporation Ltd., where the Tribunal allowed Cenvat Credit in similar circumstances. The comparison with the Birla Corporation case highlighted the need to consider whether suppression existed on the part of the present appellants, emphasizing the recurring nature of the issue.

Conclusion:
After hearing both sides and considering the precedents, the Tribunal found that the appellants were entitled to Cenvat Credit based on the supplementary invoices issued by the coal companies. The decision was influenced by the absence of fraud and suppression on the part of the appellants, aligning with the Tribunal's previous rulings in similar cases. By following the precedent set by the Birla Corporation case, the Tribunal set aside the impugned orders and allowed the appeals, granting consequential relief to the appellants.