2017 (3) TMI 459 - AT - Central Excise

CENVAT credit - denial on the ground that the assessee is not eligible to take credit on the strength of documents, which are not statutorily prescribed - Held that - CBEC vide Circular No. 218/52/96-CX dated 04.06.1996 has clarified that such persons who are taking part in transit sale need not get themselves registered as per provisions of Rule 57G of the CER, 1994 - the appellant is inconsonance with the procedure prescribed by the department - also, there is no dispute that both the duty paid inputs and the documents indicating payment of duty were received by the appellant and used in the manufacture of finished goods. It is now a well accepted legal proposition that minor procedural lapses cannot be made as a basis for denying credit to the manufacturer - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether the appellant can take CENVAT credit based on invoices from manufacturers or registered dealers of inputs without direct purchase and involving unregistered dealers as intermediaries.

Analysis:
The appeal was filed against the Order-in-Appeal upholding the Order-in-Original, which denied the appellant CENVAT Credit for using documents not statutorily prescribed. The appellant argued that they received duty paid inputs directly in their factory under invoices mentioning them as "Consignee" and unregistered dealers as "Buyer." The appellant relied on CBEC Circulars stating no separate invoice is needed if inputs are directly received under the manufacturer's invoice. The Revenue contended that since the invoices listed an intermediate unregistered buyer, they were improper for CENVAT Credit.

The key issue was whether the appellant could claim CENVAT Credit based on invoices involving unregistered dealers as intermediaries. The Circular clarified that dealers in transit sales need not be registered, and the movement of goods on the manufacturer's invoice suffices as a duty paying document. The appellant's procedure aligned with the department's guidelines, and the receipt and use of duty paid inputs were undisputed. It was established that minor procedural lapses should not bar credit to the manufacturer.

Considering the above, the Tribunal set aside the impugned order, allowing the appeal filed by the appellant. The judgment emphasized that adherence to the prescribed procedure and the actual receipt and utilization of duty paid inputs justified granting CENVAT Credit, despite minor procedural discrepancies.