2018 (8) TMI 978 - AT - Central Excise

CENVAT Credit - duty paying invoices - supplementary invoices - Rules 9 (1) (b) of CCR 2004 - Held that - In the case of M/S BIRLA CORPORATION LTD. VERSUS CGST, CC & CE, JABALPUR 2018 (7) TMI 1264 - CESTAT NEW DELHI , where it has been specifically noted that the connected matters of South Eastern Coal Field Ltd. are pending adjudication before the Hon ble Apex Court, issue being already sub-judiced the element of confusion cannot be ruled out. Suppression being altogether contradictory to confusion cannot be made applicable in the given circumstances, unless and until there is some apparent positive act of the appellant on the record. Mere failure of ascertaining about the exclusion part of Rule 9 (1) (b) cannot be held to be the act of suppression or collusion on part of the appellant. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Denial of Cenvat Credit based on supplementary invoices issued by manufacturer
- Interpretation of Rule 9 (1) (b) of CCR 2004
- Allegation of suppression and collusion by appellant
- Applicability of Rule 9 (1) (b) in the given circumstances
- Entitlement of appellant to avail Cenvat Credit on supplementary invoices issued by Coal Companies

Analysis:
The appeal involved a dispute regarding the denial of Cenvat Credit to the appellant based on supplementary invoices issued by the manufacturer. The appellant, a cement and clinker manufacturer, availed Cenvat Credit on inputs, capital goods, and input services under Cenvat Credit Rules, 2004. The Department alleged that the appellant took Cenvat Credit based on differential excise duty paid by subsidiary companies of Coal India Ltd., which was deemed impermissible under Rule 9 (1) (b) of CCR 2004. The Original Adjudicating Authority and the subsequent order upheld the demand, leading to the present appeal.

During the hearing, the appellant cited precedents where similar issues were decided in favor of the appellants, indicating that Rule 9 (1) (b) of CCR was not applicable in those circumstances. The Department, however, argued that the appellant should have verified whether the supplementary invoices fell under the exclusion clause of Rule 9 (1) (b) and that the alleged suppression and collusion could not be dismissed. The Department contended that the permission under Rule 9 (1) (b) could not be extended to the appellant due to their failure to ascertain the relevant details.

After considering the arguments and reviewing the precedents cited, the Tribunal observed that the issue of entitlement to Cenvat Credit on supplementary invoices issued by Coal Companies was pending adjudication before the Honorable Apex Court. The Tribunal noted that confusion existed due to the sub-judice nature of the matter, and suppression could not be established without positive acts of the appellant. Mere failure to ascertain the exclusion part of Rule 9 (1) (b) was not indicative of suppression or collusion. Additionally, the Tribunal highlighted that the supplementary invoices were issued by government undertakings, and unless rebutted, there was no presumption of suppression or collusion.

Citing a previous Tribunal decision and its observations, the Tribunal set aside the order under challenge and allowed the appeal, concluding that the appellant was entitled to take Cenvat Credit on the supplementary invoices in question. The decision emphasized the absence of fraud and suppression on the part of the appellant and reiterated the recurring nature of the issue. As a result, the appeal was allowed with consequential relief to the appellant.