2021 (9) TMI 1197 - AT - Central Excise

CENVAT Credit - duty paying documents - bill of entry which is though in the name of the Head Office but as per the appellant the goods were received in the factory of Silvasa Unit - credit is denied on the ground that since the bill of entry is not in the name of Silvasa Unit and the appellant could not establish the receipt/consumption of the inputs in the factory of Silvasa - HELD THAT - Even though the bill of entry is bearing the name and address of the Head office the only criteria to be satisfied is that the goods under the said bill of entry has been received by a unit of the appellant company and the same is used by in the manufacture . Therefore, on the ground of the bill of entry bearing in the name of Head office, credit cannot be denied. As regard the receipt and use of the goods in the appellant s factory, it is found that the adjudicating authority as well as the commissioner (Appeals) given the finding that the appellant could not satisfy the Audit Officer with the documents regarding receipt and use of the goods. I completely disagree with the adjudicating authority for the reason that once the show cause notice was issued, it is the adjudicating authority to satisfy himself that whether the charge made in the show cause notice is established or not. He cannot depend on the Audit Officers view otherwise whole purpose of adjudication will be of no use. As submitted by the Learned Counsel and referred to the various documents that the documents were produced before the adjudicating authority it was incumbent on the adjudicating authority to verify those documents and give an independent finding without referring to the objection raised by the Audit Officer which the adjudicating authority has filed to do so - Since, all the documents are not produced and verification was not done at the adjudication stage the only option left is to remand the matter to the adjudicating authority. Appeal allowed by way of remand.

Summary

Issues:
- Admissibility of Cenvat credit based on bill of entry in the name of Head Office
- Requirement of establishing receipt and consumption of goods in the factory
- Invocation of extended period in the show cause notice

Analysis:
1. The appellant availed Cenvat credit based on a bill of entry in the name of the Head Office, claiming that the goods were received in the factory of Silvasa Unit. However, the department contended that without establishing the receipt and consumption of inputs in the Silvasa factory, the credit cannot be allowed, leading to denial of the credit.

2. The appellant's counsel argued that denial solely based on the bill of entry being in the name of the Head Office is unjustified. Citing relevant judgments, the counsel emphasized that if it can be proven that the goods were indeed received and utilized in the appellant's factory, credit should not be denied. The appellant submitted documents like SAP accounts and LR to support their claim, asserting that the lower authorities failed to consider these documents adequately.

3. The revenue representative reiterated the lower authority's findings, emphasizing the lack of evidence regarding the receipt and use of goods covered under the bill of entry in the appellant's factory. Due to the presence of multiple units, the bill of entry under the Head Office's name was deemed invalid for claiming Cenvat credit by the appellant unit.

4. The Tribunal noted two grounds for denying Cenvat credit: the bill of entry being in the name of the Head Office and the absence of a clear correlation between the goods covered under the bill of entry and their receipt and consumption in the appellant's factory.

5. Regarding the first ground, the Tribunal relied on previous judgments to assert that credit cannot be denied solely based on the bill of entry bearing the Head Office's name and address.

6. The Tribunal emphasized that the critical factor is whether the goods under the bill of entry were received and used in the appellant's unit for manufacturing. Disagreeing with the lower authorities' findings, the Tribunal highlighted the adjudicating authority's responsibility to independently verify documents and establish the receipt and use of goods, rather than relying solely on the Audit Officer's opinion. Due to incomplete verification and document scrutiny, the matter was remanded back to the adjudicating authority for a thorough reconsideration.

7. Consequently, the appeal was allowed by way of remand to the adjudicating authority, with the issue of limitation left open for further consideration.