2015 (9) TMI 724 - HC - Central Excise

Disallowance of CENVAT Credit - availment of cenvat credit on the strength of documents issued by Volvo India Private Limited, consigned to M/s.Nav Bharat Corporation - Held that - Appellant had availed cenvat credit on the basis of the invoices issued by M/s.Volvo India Pvt. Ltd., consigned to M/s.Nav Bharat Corporation, who in turn, sent the materials to the assessee for remade, refined, reconditioned or for any other reasons. Admittedly, the invoices in question are not in the name of the appellant. - assessee had stated that the manufacturer sent the goods to M/s.Nav Bharat Corporation, who in turn sent the same to the assessee for remake. The assessee did not show any documentary proof that the said goods were actually received into their factory and used in the manufacture of final products. To avail cenvat credit, the goods should be endorsed to him by the consignee. Hence, the invoice, on which the credit is taken, should be specific to that consignee. Unless, the invoice is specific, credit should not be availed. Rule 7(1) of the Cenvat Credit Rules, 2002, specifies that the invoice, based on which credit is availed, should be in the name of the person, who availed the credit. In the present case, the invoices in question are not in the name of the appellant. Hence, the appellant is not entitled to avail the credit. Therefore, the Department was justified in reversing the credit, which was affirmed by the Tribunal correctly. Extended period of limitation - suppression of facts - Held that - There is no reference to the document dated 15.1.2002 said to have been addressed to the Department. The Adjudicating Authority held that no proof has been placed before him to show that the Department was aware of the issue during the material period and no proof has been submitted to support the claim that the subject goods were actually received into the factory and put into use in the manufacture of the final products. This finding of the Adjudicating Authority was confirmed by the Commissioner (Appeals) as well as by the Tribunal - no reason to differ with the findings of the Authorities below. We find no question of law much less any substantial question of law arises for consideration in this appeal - Decided against assessee.

Summary

Issues Involved:
1. Eligibility of CENVAT credit based on invoices not in the name of the appellant.
2. Allegation of suppression of facts and invocation of extended period of limitation.

Detailed Analysis:

1. Eligibility of CENVAT Credit Based on Invoices Not in the Name of the Appellant:

The appellant, engaged in the manufacture of trailers, availed CENVAT credit on the strength of documents issued by Volvo India Private Limited, consigned to M/s. Nav Bharat Corporation. The appellant received the material in their factory during January 2002 to August 2002 and availed CENVAT credit based on 8 invoices issued by M/s. Volvo India Pvt. Ltd. However, the Adjudicating Authority found that the invoices in question were not in the name of the appellant, nor was there any endorsement indicating that the goods were consigned to them. The authority stated, "To avail credit, one of the rudimentary requisites is that the goods should be consigned to the person intending to avail the credit or else, the goods should be endorsed to him by the consignee." Consequently, the credit was disallowed as the appellant failed to provide documentary proof that the goods were received and used in the manufacture of final products. This decision was upheld by the Commissioner (Appeals) and the Tribunal, which emphasized that Rule 7(1) of the CENVAT Credit Rules, 2002, specifies that the invoice must be in the name of the person availing the credit.

2. Allegation of Suppression of Facts and Invocation of Extended Period of Limitation:

The appellant contended that there was no suppression of facts. However, the Adjudicating Authority noted that the burden of proof regarding the admissibility of credit lies on the manufacturer availing the credit. The appellant failed to provide proof that the Department was aware of the issue during the material period or that the goods were received and used in the manufacture of final products. The authority justified the invocation of the extended period of limitation, stating, "No proof has been placed before me to show that the Department was aware of the issue during the material period and neither has any proof been submitted to support the claim that the subject goods were actually received into the factory and put into use in the manufacture of the final products." This finding was confirmed by the Commissioner (Appeals) and the Tribunal, which dismissed the appellant's plea of bona fide belief and noted that the appellant's letter dated 15-1-2002 did not mention the invoices from M/s. Volvo India Pvt. Ltd., indicating deliberate suppression to evade duty.

Conclusion:

The High Court concluded that the appellant was not entitled to avail the CENVAT credit as the invoices were not in their name, and there was no documentary proof that the goods were received and used in manufacturing. The court also upheld the finding of suppression and the invocation of the extended period of limitation, stating, "We find no reason to differ with the findings of the Authorities below. We find no question of law much less any substantial question of law arises for consideration in this appeal." Consequently, the appeal was dismissed with no costs.