2009 (8) TMI 563 - AT - Central Excise

Cenvat Credit- Documents- The appellants are engaged in the manufacture of M.S. Ingots classifiable under Sub -heading No. 7206.90 of the Schedule to the Central Excise Tariff Act, 1985. The appellants were availing Cenvat credit facility. They purchased three consignments from M/s. Maheshwari Udyog, Visakhapatnam under cover of duty paid Central Excise invoices issued by registered dealer. They availed credit on the inputs on the basis of invoices of M/s. Maheswari Udyog a registered dealer. It has been alleged that M/s. Maheshwari Udyog purchased the goods from M/s. A.S. Traders, Visakhapatnam who purchased the goods from manufacturer of goods i.e. Rashtriya Ispat Nigam Ltd., Visakhapatnam. It has further been alleged that M/s. A.S. Traders would be first stage dealer and Maheshwari Udyog would second stage dealer. So, invoice issued by Maheshwari Udyog on the basis of manufacturer s invoice is invalid document. A show cause notice was issued proposing demand of duty of Rs. 42,668/- and imposition of penalty along with interest. Original authority dropped the show cause notice. Revenue filed appeal before the Commissioner (Appeals) whereby adjudication order was set aside. Hence, the appellants filed this appeal. Held that- no dispute regarding particulars of duty paid on goods declared in invoice. Invoice contained both dealer s as well as assessee s name. Goods directly received from manufacturer and supplied to assessee. Thus the order of original authority restored.

Summary

Issues involved:
1. Validity of Cenvat credit facility based on invoices from registered dealers.
2. Interpretation of dealer stages in the supply chain.
3. Admissibility of credit based on invoices from second stage dealer.
4. Application of case law precedent in determining credit eligibility.

Analysis:
1. The case involved the appellants engaged in manufacturing M.S. Ingots availing Cenvat credit facility based on invoices from M/s. Maheshwari Udyog, Visakhapatnam. The dispute arose regarding the validity of invoices issued by Maheshwari Udyog, a second stage dealer, who allegedly purchased goods from A.S. Traders, not a registered dealer, who in turn sourced from the manufacturer, Rashtriya Ispat Nigam Ltd.

2. The Advocate for the appellants argued that Maheshwari Udyog directly received goods from the manufacturer, RINL, and issued valid invoices as a registered dealer. The original authority had dropped proceedings after verifying the receipt of goods. The Advocate relied on a Tribunal decision to support the claim that the origin of goods from the manufacturer validates the credit claim.

3. On the other hand, the Revenue representative contended that since A.S. Traders were not registered dealers, Maheshwari Udyog could not be considered a second stage dealer. They argued that the case law cited by the appellants was distinguishable as it involved a different scenario where the dealer's name was on the invoice, unlike in this case where goods were directly received from the manufacturer.

4. The Tribunal analyzed the findings of the original authority and the Commissioner (Appeals) regarding the direct receipt of goods by Maheshwari Udyog from the manufacturer. The Tribunal noted that the duty payment details were not in dispute, and the goods were supplied to the appellants without any deviation in the supply chain. Relying on the precedent and the direct receipt of goods from the manufacturer, the Tribunal overturned the Commissioner's decision and reinstated the original authority's order in favor of the appellants, allowing the appeal with consequential relief.