2017 (1) TMI 553 - HC - Service Tax

CENVAT credit - Rule 9(2) of the CENVAT Credit Rules, 2004 - Whether bills of entry in the name of M/s Godfrey Phillips India Ltd. and not bearing the endorsement of proper office of Customs are valid documents under Rule 9 of the CENVAT Credit Rules, 2004 so as to entitle the respondent (a distinct manufacturer) to avail CENVAT Credit? - Held that - there was no dispute about the duty paid nature of the capital goods and receipt of same by the assessee and used also for its own internal purposes. No violation of Rule 9 ibid has been recorded. Further, Rule 9(2) ibid provides exception that if the said document contains the details of duty or service tax payable, description of the goods or taxable service, name and address of the factory or warehouse or premises of first or second stage dealers or provider of output service , and the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, is satisfied that the goods or services covered by the said document have been received and accounted for in the books of the account of the receiver, CENVAT credit may be allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Interpretation of Rule 9 of the CENVAT Credit Rules, 2004 regarding the validity of bills of entry without the endorsement of the proper office of Customs.
2. Whether the diversion of imported capital goods in the name of another entity violates Rule 9 of the CENVAT Credit Rules, 2004.

Analysis:
1. The case involved a Central Excise Appeal under Section 35-G of the Central Excise Act, 1944 against a Tribunal order dated 01.07.2011 for the period of 2008. The main question of law was whether bills of entry in the name of a different entity, not bearing the endorsement of the proper office of Customs, are valid documents under Rule 9 of the CENVAT Credit Rules, 2004 to allow the respondent to avail CENVAT Credit. The respondent had taken CENVAT Credit on imported capital goods diverted to them, which the department challenged as a violation of Rule 9.

2. The Tribunal found no dispute regarding the duty paid nature of the capital goods, their receipt by the assessee, and their internal use. It was established that the assessee had satisfied the requirements of Rule 9(2) of the CENVAT Credit Rules, 2004. Rule 9(2) specifies that CENVAT credit cannot be taken unless all prescribed particulars are contained in the document. However, if the document lacks some details but includes duty or tax payable, along with other essential information, and the concerned officer is satisfied about the receipt and accounting of goods, CENVAT credit may be allowed. As the Tribunal had already made factual findings in favor of the assessee, no legal questions arose, leading to the dismissal of the appeal.

This detailed analysis of the judgment addresses the issues involved, the legal interpretation of Rule 9, and the specific circumstances of the case, ensuring a comprehensive understanding of the legal reasoning and outcome.