2018 (10) TMI 1197 - AT - Central Excise

CENVAT Credit - goods/ transformers returned by the buyers u/r 16(1) of CER 2002 - duty paying documents - credit availed on the basis of triplicate copy of invoices meant for the consigner - whether triplicate copy of invoices are valid documents in terms of Rule 9 of Cenvat Credit Rules, 2004 for availing Cenvat Credit - extended period of limitation. Held that - The provisions of Rule 9 of Cenvat Credit Rules, 2004 are not applicable in case of manufacturer who takes credit under the provisions of Rule 16 (l) of Central Excise Rules, 2002 as it is a special provision by way of exception to the normal rules. The decision of Tribunal in the case of BAPL Industries Ltd. vs. CCE 2006 (1) TMI 6 - CESTAT, CHENNAI is squarely applicable to the facts of present case, wherein it was held that such credit taken on the basis of manufacturer s own triplicate copy of invoice under which the final product was originally cleared. These invoices are invoices of input-manufacturer. Hence, it cannot be said that during the disputed period there is no provision of law for using triplicate copy for Cenvat purposes. Therefore, triplicate copy was valid for Cenvat purpose during the disputed period. Credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether the appellant, a manufacturer of Transformers, rightly took Cenvat Credit on goods/ transformers returned by buyers during January 2011 to March 2012 under Rule 16(1) of Central Excise Rules, 2002 based on triplicate copy of invoices not considered valid under Rule 9 of Cenvat Credit Rules, 2004.

Analysis:
The case involved a dispute regarding the appellant's availing of Cenvat Credit on sales returns without proper documents during January 2011 to March 2012. The Revenue contended that Rule 9 of Cenvat Credit Rules, 2004 mandates specific documents for availing credit, which the appellant did not possess. Consequently, a show cause notice was issued proposing disallowance of Cenvat Credit and penalties. The Additional Commissioner upheld the disallowance and penalty in the Order-in-Original dated June 26, 2015.

The appellant, aggrieved by the decision, appealed to the learned Commissioner (Appeals), who also rejected the appeal. Subsequently, the appellant approached the Tribunal challenging the decision. The appellant argued that Rule 9 of Cenvat Credit Rules outlines the standard procedure for receiving inputs, while Rule 16 of Central Excise Rules, 2002 provides exceptions for goods returned to the factory after clearance. The appellant claimed entitlement to Cenvat Credit under Rule 16 for goods returned, even without the prescribed documents under Rule 9.

The appellant's counsel relied on a precedent set by a Coordinate Bench of the Tribunal in the case of BAPL Industries Ltd. vs. CCE, where it was held that using the manufacturer's triplicate copy of invoices for Cenvat Credit purposes was valid. The appellant contended that the unique identification numbers on the products facilitated easy identification, supporting their claim for Cenvat Credit under Rule 16.

After considering the arguments, the Tribunal found that Rule 9 of Cenvat Credit Rules, 2004 did not apply to manufacturers availing credit under Rule 16(1) of Central Excise Rules, 2002, as it provided a special exception. The Tribunal also noted that the case aligned with the precedent set by the Coordinate Bench, thereby allowing the appeal and overturning the impugned order. The appellant was granted consequential benefits as per the law.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing the applicability of Rule 16 for availing Cenvat Credit on goods returned, despite the absence of documents specified under Rule 9. The decision was based on the special provisions of Rule 16 and the precedent established by the Tribunal's Coordinate Bench.