2018 (2) TMI 130 - AT - Central Excise

CENVAT credit - duty paying documents - It is the case of the Revenue that the invoices issued by OPL did not contain the details as required under the provisions of Rule 9(2) of CENVAT Credit Rules, 2004 - What are the conditions to avail CENVAT credit on inputs? - Held that - mention of vehicle Registration No. was not warranted in this case since the supplier and receiver of the goods were situated in the same premises, and accordingly, mention of incorrect vehicle no. has little effect regarding admissibility of CENVAT credit, and such error may be treated as the clerical mistake as contended by the appellant in various statements and grounds of appeals since nothing contrary is apparent from the records. What are the responsibilities of the purchaser of inputs to make them eligible to avail CENVAT credit? - Held that - the first appellate authority has called for and considered all the records that need to be gone into to come to the conclusion that whether the main respondent has correctly availed cenvat credit of the duty paid by OPL. This factual matrix has not been controverted in the grounds of appeal. What are the responsibilities of the supplier of the inputs and issuer of CENVAT credit? - Held that - it is on record and held by the first appellate authority that OPL has in fact filed returns with the authorities as and when manufactured and cleared grey fabrics. Appeal dismissed - decided against Revenue.

Summary

Issues involved:
- Denial of CENVAT credit on invoices lacking required details
- Allegations of fraudulent purchase and misuse of CENVAT credit
- Dispute over duty liability and payment for goods
- Time-barred show cause notice
- Responsibilities of purchaser and supplier for CENVAT credit

Detailed Analysis:

Issue 1: Denial of CENVAT credit on incomplete invoices
The Revenue alleged that the main Respondent availed CENVAT credit based on invoices lacking required details under Rule 9(2) of CENVAT Credit Rules, 2004. The investigation revealed discrepancies in the movement of goods and duty payment. The adjudicating authority confirmed the demand, imposing penalties on both Respondents. The first appellate authority set aside the order-in-original, allowing the appeal. The Revenue argued that the CENVAT credit availed was unreliable and utilized fraudulently, citing discrepancies in duty liability and lack of intention to manufacture. However, the first appellate authority found no grounds to deny the credit, considering the registration and payment details, ultimately upholding the appeal.

Issue 2: Allegations of fraudulent purchase and misuse of CENVAT credit
The Revenue contended that the CENVAT credit availed was fictitious, with no movement of goods and fraudulent invoicing by the supplier. The first appellate authority examined the records and found no substantial evidence to support the Revenue's claims. The authority emphasized the responsibility of the purchaser to confirm the genuineness of invoices and maintain proper records. The appellate authority's detailed analysis and reliance on relevant case laws supported the decision to allow the CENVAT credit, rejecting the Revenue's allegations of fraud.

Issue 3: Dispute over duty liability and payment for goods
The Revenue raised concerns about duty liability discrepancies and partial payment for goods received. The first appellate authority reviewed the payment details, ledger accounts, and CA certificate, concluding that there was no suspicion regarding the consideration paid by the main Respondent. The authority's thorough examination of the financial records and legal precedents supported the decision to uphold the CENVAT credit availed by the main Respondent, dismissing the Revenue's objections.

Issue 4: Time-barred show cause notice
The Respondents argued that the show cause notice demanding CENVAT credit availed was time-barred, citing accepted and acknowledged monthly returns filed with the authorities. The first appellate authority considered the timeliness of the notice and found it to be invalid, further strengthening the position in favor of the Respondents.

Issue 5: Responsibilities of purchaser and supplier for CENVAT credit
The first appellate authority highlighted the obligations of both the purchaser and supplier concerning CENVAT credit. It emphasized the need for proper documentation, verification of invoices, and compliance with regulatory requirements. By examining the responsibilities of each party involved, the authority ensured a comprehensive analysis of the case, leading to the decision to uphold the CENVAT credit availed by the main Respondent.

In conclusion, the appellate tribunal upheld the impugned order, rejecting the Revenue's appeals and affirming the decision in favor of the Respondents based on a detailed analysis of the issues involved, legal provisions, and factual findings presented during the proceedings.