2023 (5) TMI 8 - AT - Central Excise

Irregular availment CENVAT Credit - ineligible documents namely supplementary invoice/debit notes issued by M/s. Tata Steel Ltd. - violation of provisions of Rule 3 and Rule 9 of the CENVAT Credit Rules, 2004 - period January 2009 to December 2013 - Doctrine of Merger. HELD THAT - The Tribunal vide Final Order No.75350/2022 dated 14.06.2022 2022 (6) TMI 1390 - CESTAT KOLKATA has held that We direct that the original authority examine the dated Certificate, which the Ld. Counsel for the appellants has undertaken to submit to the satisfaction and allow the credit as may be applicable as per law. We also direct that the entire exercise be completed within the period of eight weeks from the date of receipt of this order. The Ld. Commissioner in the denovo Order-in-original which is also the order impugned has recorded that the details of invoices mentioned in the documents submitted by the assessee were matched with the copies of invoices submitted and were found to match. In subsequent paragraphs though he reiterates the specific direction of the Tribunal, but goes on to examine the statutory provisions and has passed the impugned order - the Ld. Commissioner has re-adjudicated the dispute which is already settled by the earlier order of this Tribunal in the first round of litigation. Thus, under the Doctrine of Merger, the Commissioner was not correct in re-visiting the issue which was already concluded in the remanded matter by the Tribunal, wherein directions were very specific and the Ld. Adjudicating authority was only required to examine the Certificate issued by the Senior Manager Accounts (Indirect Taxation) on behalf of TSL since it was not submitted before the Ld. Adjudicating authority during adjudication. The denovo order passed by the Adjudicating authority is hit by Doctrine of Merger as he has gone beyond the directions or findings of this Tribunal in the earlier round of litigation - Appeal allowed.

Summary

Issues involved:
The judgment involves the irregular availment of CENVAT Credit based on supplementary invoices/debit notes issued by a company, leading to a dispute regarding the validity of these documents for claiming credit under the CENVAT Credit Rules, 2004.

Details of the Judgment:

Issue 1: Allegation of irregular CENVAT Credit based on ineligible documents
The Appellant, engaged in the manufacture of TMT bars and rods, faced a Show Cause Notice alleging irregular availment of CENVAT Credit on the basis of supplementary invoices/debit notes issued by another company. The department contended that the documents were invalid for availing CENVAT Credit as they did not contain all required information under Rule 11 of the Central Excise Rules, 2002. The Adjudicating authority confirmed the recovery of the irregularly availed credit and imposed penalties. The Appellant appealed, arguing that the documents were valid for claiming credit as they were raised due to price variation and contained necessary details for availing CENVAT Credit.

Issue 2: Disallowance of CENVAT Credit and penalties
The Adjudicating authority disallowed the CENVAT Credit amount and ordered its recovery along with interest and penalties. The Appellant challenged this decision, citing the directions of the Tribunal to examine the certificate issued by the company and allow the credit as per law. The Appellant argued that the documents submitted were valid for claiming credit, as verified by the Range Officer and supported by the certificate issued by the company. The Commissioner's decision was criticized for not following the Tribunal's directions and for disregarding the legal requirements for claiming CENVAT Credit.

Issue 3: Doctrine of Merger and setting aside the impugned order
The Tribunal found that the Commissioner had re-adjudicated a dispute already settled in the earlier round of litigation, contrary to the Doctrine of Merger. The Commissioner's denovo order was set aside as it went beyond the Tribunal's directions, leading to the allowance of the Appellant's appeal with consequential relief.

In conclusion, the Tribunal set aside the impugned order, allowing the Appellant's appeal based on the failure to adhere to the Tribunal's directions and the Doctrine of Merger.

(Order pronounced in the open court on 27 April 2023.)