2017 (3) TMI 499 - AT - Central Excise

CENVAT credit - inputs - denial on the premise that the invoices against which the appellant has taken the credit were not pre-authenticated by the dealer and the dealer has not maintain records for goods supplied to the appellant - Held that - As this Tribunal in the case of Steel Authority of India ltd. 2008 (9) TMI 330 - CESTAT, KOLKATA has held that pre authentication of invoices is a procedural lapse and cenvat credit cannot be denied on the basis of such lapse. Therefore, the cenvat credit cannot be denied to the appellant. Non maintenance of records by the dealer, cannot be the ground for denial of cenvat credit, therefore, on these grounds, the appellant is entitled to avail cenvat credit as there is one to one correlation with invoice issued by manufacture and the dealer - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Denial of cenvat credit on inputs due to lack of pre-authenticated invoices
- Non-maintenance of records by the dealer as per Rule 9(4) of the Cenvat Credit Rules, 2004

Analysis:
1. The appellant appealed against the denial of cenvat credit on inputs because the invoices used for claiming credit were not pre-authenticated by the dealer and the dealer did not maintain records for goods supplied to the appellant.

2. The Tribunal considered the arguments from both parties and noted that the main reason for denying cenvat credit was the lack of pre-authenticated invoices.

3. Referring to a previous case involving Steel Authority of India Ltd., the Tribunal highlighted that non-pre-authentication of invoices was considered a procedural lapse in several instances, and credit was allowed in such cases.

4. Citing the Steel Authority of India Ltd. case, the Tribunal emphasized that the absence of pre-authenticated invoices should not be a reason to deny cenvat credit, as it was viewed as a procedural lapse.

5. Regarding the issue of non-maintenance of records by the dealer as per Rule 9(4) of the Cenvat Credit Rules, the Tribunal clarified that the dealer is required to maintain records for passing cenvat credit on goods received from the manufacturer to the buyers on a prorate basis.

6. It was noted that in the present case, the invoices in dispute had corresponding invoices of the same quantity issued by the manufacturer to the appellant, indicating proper documentation and duty payment by the manufacturer. Therefore, the lack of record maintenance by the dealer was not a valid ground to deny cenvat credit.

7. As both issues were resolved in favor of the appellant, the Tribunal ruled that the appellant rightfully claimed cenvat credit on inputs, especially since no investigation was conducted at the appellant's end. Consequently, the impugned order denying the credit was set aside, and the appeal was allowed with any necessary consequential relief.