2005 (5) TMI 192 - AT - Central Excise

Summary

Issues: Denial of Modvat credit on returned goods due to lack of valid Cenvatable document.

In this judgment by the Appellate Tribunal CESTAT, CHENNAI, the issue revolved around the denial of Modvat credit amounting to Rs. 11,018/- to the appellant for a quantity of final product returned by their buyer. The denial was based on the grounds that the goods were not received under a valid Cenvatable document. The appellant argued that the substantive requirements for availing Cenvat credit were fulfilled as the returned goods were duty-paid and reprocessed into a fresh final product. The appellant's counsel contended that the relevant Rule 7 of the Cenvat Credit Rules, 2002, did not prohibit the use of triplicate copies of invoices for Cenvat purposes, and any prohibition was only regarding extra copies prepared by the manufacturer. The appellant possessed triplicate copies of invoices evidencing duty payment on the goods in question.

Upon examining the submissions and relevant provisions of law, the Tribunal noted that Rule 7 of the Cenvat Credit Rules, 2002, did not have the intricate requirements present in the erstwhile Central Excise Rules, 1944. The Rule allowed manufacturers to take Cenvat credit based on invoices issued for clearance of inputs or capital goods without further specifications. The Tribunal observed that the simplification of rules is usually followed by clarificatory instructions, and supplementary instructions from CBEC indicated that only extra copies of invoices were prohibited for Cenvat purposes. Therefore, any regular copy of a manufacturer's invoice could be considered a valid Cenvatable document. The triplicate copies of invoices possessed by the appellant were deemed appropriate for availing Cenvat credit on the returned goods. Consequently, the Tribunal found a strong prima facie case in favor of the appellant and granted a waiver of pre-deposit and stay of recovery for the disputed amount.

This judgment highlights the importance of understanding the specific requirements and permissible documents under the relevant rules for claiming Cenvat credit, emphasizing the need for compliance with statutory provisions to avail such benefits in excise matters.