2018 (2) TMI 816 - HC - Central Excise

CENVAT credit - duty paying documents - Rule 9 of the Cenvat Credit Rules, 2004 - Held that - rule 9 nowhere provides that Cenvat credit cannot be availed on the basis of photocopy of the documents especially when the respondents have not disputed the correctness of the contents of the photocopies of the invoices produced by the petitioner - From the perusal of the certificate issued by the Superintendent, Customs and Central Excise, Range-III, Division-I, Ghaziabad, it is evident that the excise duty has been duly paid by the petitioner - petition allowed.

Summary

Issues:
Challenge to order of Deputy Commissioner, Customs and Central Excise Division for disallowing Cenvat credit based on photocopies of invoices.

Analysis:
The petitioner, a partnership firm engaged in manufacturing various products falling under Central Excise Act, sought to quash an order dated 12-5-2014 by Deputy Commissioner, Customs and Central Excise Division, Srinagar. The firm had availed benefits under Notification No. 56/2002-C.E. and closed operations in 2010-11, surrendering registration in 2013. An audit in 2008 alleged improper Cenvat credit availed based on photocopies of invoices, leading to a show cause notice in 2010. Despite the petitioner's submission of paid duty evidence, the Deputy Commissioner disallowed Cenvat credit, imposed penalties, and interest. The Commissioner (Appeals) rejected the appeal due to a delay beyond the statutory period, prompting the petitioner to approach the High Court.

The petitioner contended that Rule 9 of the Cenvat Credit Rules, 2004 did not prohibit availing Cenvat credit based on photocopies of invoices. The petitioner also presented a certificate confirming duty payment. The Revenue argued that originals were taken away, expecting their production. The Court examined Rule 9, noting that the explanation included supplementary invoices like challans for additional duty payment under the Customs Tariff Act. Notably, the rule did not explicitly prohibit Cenvat credit based on photocopies, especially when the invoice contents were undisputed. The certificate further confirmed proper duty payment by the petitioner.

Consequently, the Court found the impugned order unsustainable in law and quashed it along with the subsequent order. The writ petition was allowed in favor of the petitioner, emphasizing the legality of availing Cenvat credit based on photocopies and the evidence of duty payment provided.