2013 (3) TMI 162 - AT - Central Excise

Cenvat credit availed on the basis of annexures only and not the invoices - Held that - Appellant had produced copies of invoices issued by their Ponda unit as also copies of the invoices issued by Puttur unit, copies of annexures and RG-23D. All these invoices which accompanied the annexures are covering the goods mentioned in the annexures. The lower authorities have restricted the same on the sole ground that annexures are not certified documents for availment of credit. No merits in the above reasoning of the authorities as the goods mentioned in the annexures are duly accompanied with the invoices issued by the manufacturing units indicating payment of duty on the same very goods. The possibility of misuse of the same by any other person cannot be made a ground for denial of credit to the appellant when the duty paid character of the goods stands established and receipt by the dealer stands established. Thus denial of credit is not in accordance with the law. Invoking longer period of limitation - Held that - The demand pertains to the period April 01 to March 04 whereas the show cause notice was issued on 9-11-2005, i.e., beyond the period of limitation. The appellant has been filing quarterly returns along with copies of RG-23D registers. Thus when the credit was availed by the appellant was being reflected by them in their RG-23D register and the same document was being annexed with the quarterly returns being filed by them, it is hard to arrive at a conclusion that appellant was having any mala fide suppression or mis-statement - no intent to evade duty - demand having been raised by invoking longer period of limitation is barred by limitation - in favour of assessee.

Summary

Issues:
- Availment of Cenvat credit based on annexures without invoices
- Validity of annexures as documents for availing credit
- Dispute on the period of limitation for raising demand

Analysis:

Availment of Cenvat credit based on annexures without invoices:
The appellant, a registered dealer, received goods from manufacturing units and supplied them to customers, availing credit based on invoices issued by them. The dispute arose when it was alleged that the appellant wrongly availed Cenvat credit without actual invoices during April 2001 to March 2004. The Commissioner held that annexures cannot be the basis for availing credit, emphasizing the need for actual invoices. However, the appellant argued that goods received were accompanied by duty paid invoices from the manufacturing units, which were duly transferred along with their own goods. The appellate tribunal noted that the lower authorities did not dispute the clearance of goods, receipt by the appellant, or passing on the credit to customers. The main objection was the validity of annexures as documents for availing credit.

Validity of annexures as documents for availing credit:
The tribunal found that the appellant provided copies of invoices from the manufacturing units, annexures, and RG-23D registers, all covering the goods mentioned. Despite the lower authorities' contention that annexures were not certified documents for credit availment, the tribunal disagreed. It emphasized that the goods in the annexures were accompanied by invoices indicating duty payment, establishing the duty paid character of the goods and the receipt by the dealer. The tribunal concluded that denial of credit based on the annexures was not in accordance with the law.

Dispute on the period of limitation for raising demand:
The demand raised for the period April 2001 to March 2004 was challenged by the appellant, citing the issuance of the show cause notice on 9-11-2005, beyond the limitation period. The appellant had been regularly filing returns along with RG-23D registers, with the Revenue invoking the longer limitation period due to audit objections. However, the tribunal observed that the credit availed was reflected in the appellant's records, and there was no evidence of mala fide intent to evade duty. Consequently, the tribunal held that the demand raised beyond the limitation period was barred by limitation.

In conclusion, the tribunal set aside the impugned order, allowing the appeal both on merits regarding credit availment based on annexures and on the issue of limitation for raising the demand.