2009 (7) TMI 436 - AT - Central Excise

Eligibility to Cenvat credit availed on the basis of supplementary invoices in respect of payment of differential duty on account of rate of duty difference - According to the Revenue supplementary invoices issued when the payment of differential duty was made on account of finalization of provisional assessment or on account of price escalation alone were recognized as valid duty paying document only before 2001 Since there is no dispute of payment of duty and of credit availed substantial benefit cannot be denied for procedural irregularities - Supplementary invoice raised is for payment of differential duty to rectify the incorrect adoption of rate of duty at the time of clearance from the factory. Therefore credit cannot be denied. Revenue s appeal is dismissed

Summary

Issues:
Eligibility of Cenvat credit based on supplementary invoices for payment of differential duty.

Analysis:
The appeal concerns the eligibility of Cenvat credit based on supplementary invoices for payment of differential duty. The Revenue argues that only after March 2001 were supplementary invoices recognized as valid duty paying documents for taking credit, while the respondents had taken credit one day prior to this notification. The Tribunal noted that the supplier must pay duty, and there was no dispute over the duty paid by the respondents. Referring to a previous decision, the Tribunal emphasized that procedural irregularities should not deny substantial benefits. The issuance of supplementary invoices for payment of differential duty to correct the incorrect adoption of duty rate is considered a procedural irregularity, and hence, credit cannot be denied. Therefore, the Tribunal upheld the order extending credit and dismissed the Revenue's appeal.

The Tribunal found that the supplier's duty payment and the credit availed by the respondents were undisputed. Citing a previous case, it was established that the credit must be equal to the duty paid, and any procedural irregularities should not deny substantial benefits. The issuance of supplementary invoices for payment of additional duty due to finalization of provisional assessment or price escalation was considered a procedural irregularity. The Tribunal held that the rectification of the duty rate through supplementary invoices justified the extension of credit, and thus, upheld the decision to grant credit and dismissed the Revenue's appeal.

The cross objection, serving as a response to the Revenue's appeal, was deemed to be in the nature of comments and was subsequently dismissed.