2003 (12) TMI 106 - AT - Central Excise

Summary

Issues:
1. Availment of Cenvat credit on supplementary invoices.
2. Applicability of Rule 57AE on the timing of supplementary invoices.
3. Denial of credit based on Rule 57AB and Rule 57AE provisions.
4. Interpretation of Rule 57AB in relation to duty paid variations.
5. Receipt of goods under supplementary invoices.

Issue 1: Availment of Cenvat credit on supplementary invoices
The appellant, engaged in manufacturing excisable goods, availed Cenvat credit based on supplementary invoices issued by their sister unit for additional duty paid. The Revenue objected to this, leading to a show cause notice proposing disallowance of credit, interest, and penalty. The appellant argued that the amended Rule 57AE should apply to them as the supplementary invoices were raised post-amendment, enabling them to claim credit. The Tribunal agreed, emphasizing that the appellant was entitled to credit as the duty was paid by the input manufacturer and the amended provisions allowed for such credit based on supplementary invoices.

Issue 2: Applicability of Rule 57AE on the timing of supplementary invoices
The Tribunal noted that the supplementary invoices were raised after the amendment to Rule 57AE, which permitted credit based on such invoices issued by input manufacturers. The Tribunal found no justification in denying the appellant the benefit of credit or imposing penalties, ultimately setting aside the impugned order and granting relief to the appellant.

Issue 3: Denial of credit based on Rule 57AB and Rule 57AE provisions
The Tribunal highlighted that Rule 57AB governs the credit of duty paid on received inputs and emphasized that the credit should be equal to the duty paid. It noted that the provisions of Rule 57AE, dealing with documents and accounts, cannot override the fundamental principle that credit must match the duty paid. The Tribunal disagreed with the Revenue's argument against granting credit based on the supplementary invoices.

Issue 4: Interpretation of Rule 57AB in relation to duty paid variations
The Tribunal clarified that if the supplier pays additional duty, as in this case, the recipient factory should accrue additional credit per Rule 57AB. It emphasized that variations in duty paid should correspond to variations in credit, ensuring that the credit aligns with the actual duty paid.

Issue 5: Receipt of goods under supplementary invoices
The Tribunal addressed the Commissioner's argument that goods cannot be received under supplementary invoices, stating that such invoices are issued post-removal and delivery of goods under the original invoice. It concurred with the decision to grant credit for the supplementary invoices, rejecting the notion that goods were received under them.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT, Mumbai covers the issues related to the availment of Cenvat credit on supplementary invoices, the timing and applicability of relevant rules, the denial of credit based on specific provisions, the interpretation of Rule 57AB, and the receipt of goods under supplementary invoices.