2016 (12) TMI 769 - AT - Central Excise

Denial of CENVAT credit - imposition of penalty - denial to manufacturer buyer of the Aluminum Scrap on the ground that the consignment agent s godown was located in Gurgaon and the invoices were issued from their office in Delhi for dispatch - Held that - The facts of the case are that the goods against which invoice have been issued from Gurgaon and stored in godown is not in dispute. It is not also disputed that the goods are not received to the buyer. The payment of these goods has been received by the importer from the manufacturer buyers. In that circumstances, I hold that the cenvat credit to the manufacturer buyer cannot be denied. Therefore, I hold that the impugned proceedings were not warranted against the appellant. Accordingly, the same are set aside - appeal allowed - decided in favor of appellant-assessee.

Summary

Issues:
- Denial of Cenvat Credit to manufacturer buyer
- Imposition of penalty on all the appellants

Analysis:
The appeal before the Appellate Tribunal CESTAT Chandigarh involved the denial of Cenvat Credit to the manufacturer buyer of Aluminum Scrap and the imposition of penalties on all the appellants. The case revolved around M/s Suren International importing aluminum scrap and selling it through a consignment agent to various manufacturer buyers. The dispute arose as invoices were issued from the head office in Delhi, while the goods were stored in a godown in Gurgaon. The main contention was that this arrangement made the Cenvat credit unavailable to the manufacturer buyer.

The Tribunal noted that the goods were indeed stored in Gurgaon as per the invoices, and it was undisputed that the goods had not been received by the buyer. However, the payment for these goods had been received by the importer from the manufacturer buyers. In light of these facts, the Tribunal held that denying the Cenvat credit to the manufacturer buyer was not justified. Consequently, the Tribunal set aside the impugned proceedings and allowed the appeals, providing for any consequential relief deemed necessary.

In conclusion, the Tribunal found that the mere issuance of invoices from a different location than the storage of goods did not warrant the denial of Cenvat credit to the manufacturer buyer. The decision emphasized the importance of considering the actual receipt of goods and the payment made in determining the eligibility for Cenvat credit.