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2020 (11) TMI 351 - AT - Central ExciseIrregular availment of Cenvat credit - Ineligible inputs - It is the case of the department that the said inputs as claimed to have been received by the appellant assessee in their factory premises on the strength of invoices issued by M/s. Roshanlal Bhagirathmal are not the eligible inputs for the purpose of taking credit in terms of Cenvat Credit Rules, 2004 and Central Excise Rules, 2002, as the same were not purchased from the said dealer - CBIC vide Circular No. 1003/10/2015-CX dated 05.05.2015 - HELD THAT - From the Circular, it is unambiguously clear that if the invoice issued by the manufacturer contains the details of the Appellant as consignee, they are entitled to Cenvat credit even if the buyer is unregistered. The Tribunal in HYDRO ELECTRO MACHINERY VERSUS COMMISSIONER OF C. EX., MUMBAI-III 2017 (2) TMI 876 - CESTAT MUMBAI where it was held that Even if the purchase of the inputs were made by the appellant from an agent of the second stage dealer but duty paying invoices is consigned to the appellant, credit is legally admissible to the appellant. Appeal allowed - decided in favor of appellant.
Issues:
Irregular availment of Cenvat credit against invoices from a registered dealer, disallowance of Cenvat credit by the adjudicating authority, rejection of appeal by lower appellate authority, entitlement to Cenvat credit based on consignee details in invoices, applicability of Circular No. 1003/10/2015-CX, question of suppression by the appellant. Analysis: The case involved the appellant, engaged in manufacturing various components, facing a show cause notice for irregular Cenvat credit availment against invoices from a registered dealer, M/s. Roshanlal Bhagirathmal. The department alleged that the inputs were not purchased from the said dealer, leading to disallowance of credit, demand confirmation, interest imposition, and penalty under Rule 15(2) of Cenvat Credit Rules, 2004. The lower appellate authority upheld this decision, prompting the appellant to appeal to the Tribunal. The appellant's representative argued that as the consignee details were mentioned in the invoices from manufacturers, Cenvat credit was valid, citing Circular No. 1003/10/2015-CX and Circular No. 218/52/96-CX. They contended that the vendor acted as a transit seller, fulfilling all conditions for credit availment. Additionally, it was highlighted that the appellant did not dispute receiving the inputs, emphasizing that the transactions were not merely paper transactions. The appellant also argued against the issuance of the show cause notice, claiming no suppression on their part. The Tribunal, after hearing both sides, referred to Circular No. 1003/10/2015-CX, clarifying that if the manufacturer's invoice listed the appellant as the consignee, Cenvat credit was permissible even if the buyer was unregistered. Citing the case of Hydro Electro Machinery, the Tribunal emphasized that credit was admissible when the consignee's name appeared on the invoices, regardless of the purchase transaction details. As the facts of the case aligned with the Tribunal's precedent, the impugned orders were set aside, and the appeal was allowed with consequential benefits. In conclusion, the Tribunal's decision was based on the interpretation of relevant circulars and established legal principles regarding Cenvat credit availment, emphasizing the importance of consignee details in invoices for credit eligibility, ultimately ruling in favor of the appellant due to the alignment of the case facts with established legal precedents.
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