2018 (7) TMI 1587 - AT - Central Excise

CENVAT credit - Duty paying documents - credit availed on the basis of supplementary invoices - Rule 9(1)(b) of the Cenvat Credit Rules, 2004 - Held that - There is no reason to hold that the supplementary invoice evidencing payment of additional duty amount should be treated on a different footing vis - vis the original invoices evidencing payment of duty on the said goods in as much as both these documents were issued under the same provisions of law - If the appellant were entitled to take credit on their inputs on the strength of the original invoices issued by the supplier, they can validly claim to be entitled to take cenvat credit of the additional amounts of duty paid on the same goods by the supplier under the supplementary invoices. In any case it was not in dispute that the inputs were received in the appellant s factory. The substantive requirement of cenvat credit were thus met by the party. The benefit was not liable to be denied on procedural grounds. Credit allowed - appeal allowed - decided in favor of appellant.

Issues:
- Availment and utilization of cenvat credit based on supplementary invoices issued by a registered dealer
- Interpretation of Rule 9(1)(a)(iv) and Rule 9(1)(b) of the Cenvat Credit Rules, 2004
- Legitimacy of supplementary invoices for claiming cenvat credit
- Disallowance and recovery of wrongly availed cenvat credit along with interest and penalty

Issue 1: Availment and utilization of cenvat credit based on supplementary invoices issued by a registered dealer

The appellant, engaged in manufacturing motor vehicle parts, purchased input materials from a registered dealer, M/s Tata Ryerson Limited (M/s TRL), who received goods from M/s Tata Steel Limited (M/s TSL) for certain processes. M/s TSL cleared goods to M/s TRL upon payment of Central Excise duty. A show-cause notice alleged that the appellant wrongly availed cenvat credit on supplementary invoices issued by M/s TRL, not considered eligible under Rule 9(1)(b) of the Cenvat Credit Rules, 2004. The Adjudicating Authority disallowed the credit and demanded recovery along with interest and penalty. The appellant contended that the supplementary invoices were valid documents under Rule 9(1)(a)(iv) and Rule 9(1)(b) of the Rules.

Issue 2: Interpretation of Rule 9(1)(a)(iv) and Rule 9(1)(b) of the Cenvat Credit Rules, 2004

The appellant argued that as per Rule 9(1)(a)(iv), an invoice issued by a First Stage Dealer like M/s TRL is an eligible document for cenvat credit. They emphasized that M/s TRL, as a First Stage Dealer, could issue invoices passing on Central Excise duty to customers. The appellant asserted that the supplementary invoices, despite their nomenclature, should be considered valid invoices under Rule 9(1)(a)(iv) and Rule 9(1)(b) of the Rules. The appellant cited various legal precedents to support their interpretation of the Rules.

Issue 3: Legitimacy of supplementary invoices for claiming cenvat credit

The Tribunal observed that the input supplier issued supplementary invoices to the appellant, reflecting additional duty paid. The Tribunal held that if the appellant could claim credit based on original invoices from the supplier, they should also be entitled to credit for additional duty paid reflected in the supplementary invoices. The Tribunal emphasized that the substantive requirement for cenvat credit was met by the appellant, and the benefit should not be denied on procedural grounds. The Tribunal referred to a previous case where the Commissioner (Appeals) allowed the appellant's appeal for a subsequent period, supporting the legitimacy of claiming credit based on supplementary invoices.

Issue 4: Disallowance and recovery of wrongly availed cenvat credit along with interest and penalty

The Tribunal set aside the Adjudicating Authority's decision disallowing cenvat credit based on supplementary invoices. The Tribunal noted that the supplementary invoices were issued due to a price revision by the suppliers, resulting in additional duty paid. Citing the decision in a previous case, the Tribunal held that the duty paid on the same goods by the manufacturer should be allowed as credit to the appellant, even if the invoices were termed as supplementary. As the credit was correctly availed, the Tribunal ruled that the question of interest and penalty did not arise, ultimately allowing the appeal and providing consequential relief to the appellant.

This comprehensive analysis of the judgment covers the issues related to the availment and utilization of cenvat credit based on supplementary invoices, the interpretation of relevant rules, the legitimacy of claiming credit, and the decision regarding disallowance and recovery of wrongly availed credit along with interest and penalty.

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