2014 (12) TMI 276 - AT - Central Excise

Cenvat credit - duty paying documents not in the name of appellants - appellants submits that the appellant received duty paid goods for repair, recondition under Rule 16 of the Central Excise Rules. - Penalty u/s 11AC - Held that - Appellant received duty paid goods in their factory for being remade, reconditioned under Rule 16 of the CCR 2002. it is seen that the appellant availed credit on the basis of invoices issued by M/s. Volvo India Pvt. Ltd. consigned to M/s. Nav Bharat Corporation. Admittedly, these invoices are not prescribed under Rule 7 (1) (a) of the CCR 2002 - The second part of the Rule 16 clearly stipulates that the duty paid goods should be received by the appellant and appellant shall be entitled to take cenvat credit under CCR 2002. So they are eligible to avail the credit on the basis of documents as prescribed under CCR 2002. As already stated, the invoices in question are not in the name of the appellant under Rule 7 of CCR and therefore the appellants are not eligible to avail the said credit. Appellant informed that their customer, M/s.Nav Bharat Corporation sent duty paid Trailers to remake and convert for required model. It is also stated that as per Rule 16 of the said Rules, they proposed to bring the duty paid trailers along with the documentary evidence for the duty payment and carry out modifications for converting the trailers as per customer s requirement and return back on payment of duty for the full value of remade trailers. The said letter is silent that the appellant availed credit on the basis of invoices of M/s.Volvo India Pvt. Ltd. It is a clear case that the appellants deliberately suppressed the name of M/s.Volvo India Pvt. Ltd. in their letter to evade payment of duty and extended period of limitation would be applicable. No reason to interfere with the order of Commissioner (Appeals) - Decided against assessee.

Summary

Issues:
1. Availing erroneous cenvat credit based on invoices not prescribed under Rule 7 of CCR 2002.
2. Interpretation of Rule 16 of CCR 2002 regarding availing credit for duty paid goods.
3. Applicability of case law in justifying availing credit based on invoices not in the name of the appellant.
4. Time bar issue due to alleged suppression of information in a letter to the Superintendent of Central Excise.

Analysis:
1. The case involved the appellant availing cenvat credit of Rs. 8,34,784 based on invoices issued by M/s. Volvo India Pvt. Ltd. consigned to M/s. Nav Bharat Corporation, which were not prescribed under Rule 7 of CCR 2002. The adjudicating authority and Commissioner (Appeals) upheld the demand of duty, interest, and penalty. The appellant argued that the credit was taken for repair and reconditioning under Rule 16 of CCR 2002, citing a circular and a tribunal decision. However, the Tribunal found the invoices did not meet the Rule 7 requirements, making the credit inadmissible.

2. The appellant contended that they received duty paid goods for remaking under Rule 16 of CCR 2002, allowing cenvat credit as if received as inputs. The Tribunal noted that Rule 16 permitted receiving duty paid goods for specific purposes, but the appellant's reliance on invoices not meeting Rule 7 criteria rendered the credit inadmissible. The Tribunal emphasized that the appellant must meet the prescribed documentation standards to avail cenvat credit under the rules.

3. The appellant referenced a case law involving duty paid goods returned to the factory on the appellant's invoices, arguing for a liberal interpretation in their case. However, the Tribunal distinguished the case law situation from the present case where the invoices were not in the appellant's name as required under Rule 7 of CCR 2002. The Tribunal emphasized the importance of adherence to statutory provisions for availing cenvat credit, denying the appellant's reliance on the case law.

4. The appellant raised a time bar issue, pointing to a letter to the Superintendent of Central Excise mentioning receiving duty paid trailers for modifications without disclosing the use of invoices from M/s. Volvo India Pvt. Ltd. The Tribunal found the appellant's omission deliberate to evade duty payment, leading to the application of the extended period of limitation. Consequently, the Tribunal dismissed the appeal, upholding the order of the Commissioner (Appeals) due to the inadmissibility of the cenvat credit based on non-compliant invoices and the deliberate suppression of information.