2018 (9) TMI 744 - AT - Central Excise

CENVAT Credit - duty paying invoices - credit availed on the basis of supplementary invoices - Rule 9 (1) (b) of the Cenvat Credit Rules 2004 - whether the appellant is entitled to Cenvat Credit on the basis of supplementary invoices issued by the coal company? Held that - In an identical set of facts, in the case of M/S BIRLA CORPORATION LTD. VERSUS CGST, CC & CE, JABALPUR 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 - decided in favor of appellant.

Summary

Issues:
- Entitlement to Cenvat Credit based on supplementary invoices issued by coal company
- Application of Rule 9(1)(b) of the Cenvat Credit Rules 2004
- Allegations of fraud, suppression, and willful misstatement against the coal company
- Comparison with a similar case involving Birla Corporation Ltd.
- Interpretation of previous Tribunal decision regarding the entitlement to Cenvat Credit

Analysis:
The appeal addressed whether the appellant could claim Cenvat Credit based on supplementary invoices from a coal company, with the Department contending that Rule 9(1)(b) of the Cenvat Credit Rules 2004 prohibited such credit if the duty became recoverable due to willful misstatement or suppression of facts. The coal company raised supplementary invoices due to disputes over elements in the coal's assessable value, leading to the denial of Cenvat Credit by lower Authorities. The appellant argued that the coal company's liability was debatable, as evidenced by pending proceedings, and cited a Tribunal decision involving Birla Corporation where similar credit was allowed in comparable circumstances.

The Department maintained that the prohibition under Rule 9(1)(b) applied due to allegations of suppression against the coal company. The appellant highlighted that the issue of fraud or suppression was debatable, as seen in pending proceedings and the absence of conclusive findings. The Tribunal referred to the Birla Corporation case, where credit was allowed in a similar context, emphasizing the absence of fraud or suppression by the appellant. The Tribunal noted that the issue of liability for excise duty at the coal company's end was contentious and pending before higher courts, indicating a lack of willful misstatement or suppression.

Ultimately, the Tribunal, following the precedent set by the Birla Corporation case, concluded that the appellant was entitled to Cenvat Credit based on the supplementary invoices. The decision emphasized the recurring nature of the issue and the absence of fraud or suppression by the appellant, aligning with the previous Tribunal's ruling. Consequently, the impugned order denying the credit was set aside, and the appeal was allowed, granting consequential relief to the appellant.