2016 (7) TMI 595 - AT - Central Excise

Cenvat credit denied - description of the goods disclosed in the invoice as M/S. Scrap which is not the raw material for the appellant - Held that - Appellant has been able to obtain the certificate from the Range Superintendent of supplier of goods who certified that the goods supply to the appellant are MS. Ingots and not M.S. Scrap. As the description of goods has been certified by the Range Superintendent of the supplier in the same was not examined by both the authorities below. If the same was considered, the cenvat credit could have been allowed but the authorities below have not done so but confirmed the demand against the appellant. As description of goods have been explained satisfactorily with documentary evidence, in that circumstances, thus hold that the appellant has correctly taken cenvat credit on the goods in question - Decided in favour of assessee.

Summary

Issues: Denial of cenvat credit based on incorrect description of goods in the invoice.

Analysis:
The appellant, a manufacturer of MS Rounds/bars, faced denial of cenvat credit due to the description of goods in the invoice as M/S Scrap, which was not the raw material for the appellant. The appellant procured MS Ingots from a supplier, where the description discrepancy was not initially noticed. A show cause notice was issued, leading to the denial of cenvat credit, confirmation of duty demand, and imposition of penalties. The appellant contended that the description error was a mistake by the supplier, supported by a certificate from the Range Superintendent of the supplier certifying the supply of MS Ingots instead of M.S. Scrap. The appellate authority noted that the description discrepancy was crucial in denying the credit, but the certificate from the Range Superintendent clarified the actual goods supplied. The authorities had failed to consider this certification, leading to the wrongful denial of cenvat credit. Consequently, the appellate authority set aside the impugned order, allowing the appellant's appeal and granting consequential relief.

This judgment highlights the importance of accurate description of goods in invoices for availing cenvat credit and the significance of documentary evidence to rectify discrepancies. It emphasizes the need for authorities to thoroughly consider all evidence provided by the appellant, especially when supported by official certifications, to ensure fair treatment in such cases.