2024 (8) TMI 713 - AT - Central Excise

Denial of CENVAT Credit - want of proper document to establish availability of stock and subsequent receipt at it service station - HELD THAT - While proof of payment of duties at the time of import and at the time of subsequent transfer to respective units are not denied when entire stock having been transferred to the service centre of Volvo, the parent company of the Appellant, the Appellant is eligible to avail the credit, as determine and claimed by it. The order passed by the Commissioner of GST Central Excise (Appeals-Thane) Mumbai is hereby set aside - Appeal allowed.

Summary

Issues:
Denial of CENVAT Credit for lack of proper documentation to establish stock availability and transfer at service station post amendment to Central Excise Act, 1994.

Analysis:
The case involves the denial of CENVAT Credit to the Appellant due to insufficient documentation to prove the availability of stock and subsequent transfer at its service station after certain activities were deemed as manufacturing post an amendment to the Central Excise Act. The Appellant, a service center, had stock worth a specific amount as of the date the activity became dutiable, and had paid duty on stock received post the amendment. The Department demanded payment of duties again, claiming the credits were inadmissible. The matter reached the Division Bench of CESTAT Mumbai, which found the credits admissible, directing verification of documents by the Department to ascertain the credit extent. However, the Adjudicating Authority and the Commissioner (Appeals) upheld the denial of credits. The Appellant appealed this decision.

Upon hearing submissions and reviewing the case, the Tribunal remanded the case to the jurisdictional authorities to allow credit after verifying records related to import, storage, and distribution of parts within three months. The Adjudicating Authority failed to comply with this direction, disallowing the credit due to the absence of specific documents linking stock transfer. The Appellant had submitted substantial documents, including Annexure-22 and Annexure-21, detailing stock and parts received, but the Authority disregarded them. The Appellant argued that similar relief was granted in another case by the Tribunal and a Commissioner based on the same facts and documents. The Tribunal, considering the precedents and the proof of duty payment, ruled in favor of the Appellant, allowing the appeal and setting aside the Commissioner's order.

In conclusion, the Tribunal allowed the appeal, overturning the Commissioner's decision and providing consequential relief, if any. The judgment emphasizes the importance of verifying records to determine credit eligibility and highlights the significance of compliance with Tribunal directions by the Adjudicating Authority to ensure fair adjudication.