2015 (3) TMI 868 - AT - Central Excise

Denial of CENVAT Credit - Cenvat Credit is available only to the person, to whom the goods have been sold by the manufacturer and not to any other person - Held that - Rule 9 of Rules 2004 provides that cenvat credit shall be taken by the manufacturer or the provider of output service or input service distributor, as the case may be, on the basis of an invoice issued by a manufacturer of inputs or capital goods from his factory or depot or from the premises of the consignment agent of the said manufacturer or from any other premises from where the goods are sold by or on behalf of the said manufacturer. Rule 3 of the said Rules 2004 provides a manufacturer shall be allowed to take credit the specified duty as mentioned therein, on any input received in the factory of manufacturer. In the present case, the appellant availed credit on the basis of invoice issued under Rule 9 of the said Rules. There is no dispute that the input received in the factory of the appellant. In any event, the manufacturer of input supplied the goods in DTA. Thus, there is no scope to use the documents by the overseas company. So, the denial of cenvat Credit is not justified. Appellants name was mentioned in the invoices and the goods were delivered at the appellant s factory and the cenvat credit was availed on the basis of invoices as mentioned under Rule 9 of Rules 2004 and the input utilized in the manufacture of final product. There is no dispute that the entire consignment was received by the appellant. So, there is no reason to deny the cenvat credit to the appellant. Accordingly, the impugned order is set aside. - Decided in favour of assessee.

Summary

Issues:
Denial of Cenvat Credit based on validity of invoices and ownership of goods.

Analysis:
1. The case involved the appellants engaged in the manufacture of Brass Rods, who placed orders for Brass Ingots from companies in Dubai, which were then supplied by M/s Mitesh Impex to the appellants. A show cause notice was issued proposing to deny Cenvat Credit and impose penalties for allegedly availing credit on invalid invoices.

2. The Adjudicating Authority disallowed Cenvat Credit and imposed penalties, which were later reduced by the Commissioner (Appeals). The appellant argued that Rule 9 of Cenvat Credit Rules does not restrict credit eligibility to the purchaser from the manufacturer. They cited circulars and tribunal decisions to support their claim.

3. The Revenue contended that the appellant purchased goods from Dubai companies, and credit eligibility is based on invoices issued by the manufacturer of inputs. The Tribunal found that the appellant received goods accompanied by Central Excise invoices, but the Commissioner (Appeals) noted discrepancies in credit availed on invoices issued to overseas traders.

4. The Tribunal analyzed Rule 9 of Cenvat Credit Rules, emphasizing that credit can be taken based on duty-paying documents issued by the manufacturer of inputs. It was established that the appellant availed credit on valid invoices, and the input was received in their factory, justifying the credit availed.

5. Referring to a previous case, the Tribunal held that invoices with double sets of names do not bar availing credit if the basic nature of the document as a duty-paying document is maintained. The Tribunal emphasized that technical considerations should not deny credit if the linkage between goods and recipient is established.

6. Ultimately, the Tribunal found that the appellant's name was mentioned in the invoices, goods were delivered to their factory, and credit was availed as per Rule 9 of Cenvat Credit Rules. As the entire consignment was received by the appellant, the denial of Cenvat Credit was deemed unjustified, and the impugned order was set aside in favor of the appellant.