2014 (3) TMI 348 - AT - Central Excise

Denial of CENVAT Credit - Absence of any evidence to show that the inputs were neither used in the manufacture but diverted to elsewhere - Bills of entry which were in the name of the transferor of the inputs not being endorsed in the name of the transferee/appellant - Held that - Board s Circular above has no embargo to prohibit transfer nor it says that endorsement is mandatory. It has no doubt prescribed procedure to safeguard interest of revenue so as to ensure that double claim of Cenvat credit is not made on same goods. There exists no evidence on record to show that the goods which came through the bills of entry transferred to the present appellant did not reach factory of appellant nor unused in the manufacture. So also, there is no evidence on record to show that there was abuse of the imports made by bills of entry. Nor also there exists any evidence to show that there were double claim of the Cenvat credit made. Once such situation is absent the Cenvat credit claimed by the appellant is undeniable. Revenue relates to the case of denial of Cenvat credit against endorsed bills of entry. Tribunal held against Revenue. In the case of the present appellant there was no endorsement at all. So also there was no evidence at all on record to show that goods have gone elsewhere for double claim of the Cenvat credit. When such feature is present, denial of relief to the appellant shall result in taxing input again in the finished goods making value addition - Decided in favour of assessee.

Summary

Issues involved:
Dispute over Cenvat credit entitlement due to lack of endorsement on bills of entry for transferred inputs.

Detailed Analysis:

1. The appellant claimed Cenvat credit for duty paid on imported inputs transferred to them for manufacturing purposes. The Revenue disallowed the credit citing lack of evidence that the inputs were actually used in manufacturing and not diverted elsewhere. The Revenue also questioned the absence of evidence showing the transferor had availed Cenvat credit on the same goods. Both parties agreed on the factual position due to the absence of contradictory evidence.

2. The main contention raised by the Revenue was that since the bills of entry were not endorsed in the name of the transferee/appellant, they were not entitled to claim Cenvat credit for the transferred inputs.

3. The Revenue relied on Board Circular No. 179/13/96-CX dated 29-2-1996 regarding endorsement requirements for claiming Cenvat credit. The Revenue also cited a Tribunal decision in the case of Xerox Modicorp Ltd. v. CCE, Chandigarh to support their argument.

4. After hearing both sides and examining the records along with the Board's Circular and the cited decision, it was found that the Circular did not prohibit transfer or mandate endorsement for claiming Cenvat credit. The Circular aimed to prevent double claiming of credit on the same goods. Since there was no evidence to suggest that the transferred goods were not used in manufacturing or that there was any abuse or double claiming of credit, the appellant's claim for Cenvat credit was deemed valid.

5. The Tribunal noted that the cases cited by Revenue involved denial of Cenvat credit based on endorsed bills of entry, whereas in the present case, there was no endorsement at all. Additionally, there was no evidence to support the claim that the goods were used elsewhere for double claiming of credit. Denying relief to the appellant would result in taxing the input again in the finished goods, leading to value addition. Therefore, the appeals were allowed in favor of the appellant.

6. The decision was specifically limited to the goods covered by the bills of entry in the appeals and did not address any other points not raised during the proceedings.

7. As a result of the appeals being disposed of in favor of the appellant, the Miscellaneous Applications related to the case were dismissed.