2013 (11) TMI 1159 - AT - Central Excise

Denial of Cenvat credit Name of the Applicant not mentioned in the Bills of Entry Requirements under Rule 9 of Central excise rules - Waiver of Pre-deposit - Assessee contended that Rule 9 specifies the documents against which Cenvat credit can be taken - This provision does not state that the documents should indicate the name of the person taking credit - This was the position in Rule 57G of Central Excise Rules, 1944 which was replaced by Rule 9 of Central Excise Rules Held that - The applicant has satisfied the conditions prescribed in the proviso to Rule 9(2) thus it is proper that waiver of pre-deposit of dues arising from the order is granted - the pre-deposit of dues arising from the order waived for admission of appeal till the disposal Stay granted.

Summary

Issues:
- Cenvat credit eligibility based on Bills of Entry not showing the name of the applicant
- Interpretation of Rule 9 of Cenvat Credit Rules, 2004
- Revenue's contention on potential loss due to allowing credit based on any invoice
- Application of Rule 11(2) of Central Excise Rules, 2002 to imports

Analysis:

The judgment by the Appellate Tribunal CESTAT CHENNAI involved two applications arising from a common order concerning the eligibility of Cenvat credit for a job worker manufacturing soap and detergents for a company. The dispute arose as the Bills of Entry for imported raw materials did not show the name of the applicant, leading the Revenue to contest the Cenvat credit claimed. The Revenue did not dispute the receipt of goods, their use in manufacturing, or the clearance of final products on duty payment. The disputed Cenvat Credit amounts were Rs.1,99,51,339/- and Rs.34,82,534/- along with interest and penalties.

The applicant argued that Rule 9 of Cenvat Credit Rules, 2004 does not mandate that documents must indicate the name of the person claiming credit. Reference was made to a decision by the Hon'ble Bombay High Court regarding the erstwhile Rule 57G of Central Excise Rules, 1944, allowing credit in similar circumstances. The applicant also highlighted the proviso to Rule 9(2) which empowers the Deputy Commissioner or Assistant Commissioner to allow credit if certain conditions are met, emphasizing that the credit should not be denied solely based on the name not being on the Bills of Entry.

On the other hand, the Revenue contended that allowing credit based on documents without the name of the person would create opportunities for abuse and result in revenue loss. It was pointed out that Rule 9 of CCR, 2004 requires documents to be of a specific type issued under Rule 11(2) of Central Excise Rules, 2002, which mandates showing the consignee's name.

After considering both arguments, the Tribunal found that the applicant had fulfilled the conditions specified in the proviso to Rule 9(2) as recorded in the adjudication order. Consequently, the Tribunal granted a waiver of pre-deposit of dues arising from the impugned order, allowing the appeal to be admitted, and stayed the collection of dues during the appeal's pendency. The stay petitions were allowed, and the decision was dictated and pronounced in open court.