2018 (3) TMI 1370 - AT - Central Excise

CENVAT credit - it was alleged that instead of opportunity provided by this Tribunal in remand, the appellant have failed to provide necessary verification, as such, appeals are dismissed - Held that - the appellant have done their best whatever they could do under the scheme of Act under rule - the authorities below fail to exercise their duty to make adequate enquiries by referring or calling for cross-verification report of the concerned jurisdictional officers of the manufacturers - the appellant entitled to take CENVAT credit - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Dispute over availing Cenvat credit of AED (GSI) on sugar procured from dealers.
2. Recognition of supplementary invoices by dealers under Rule 7 of Cenvat Credit Rules.
3. Verification of manufacturer's invoices for AED (GSI) paid.
4. Failure to provide original manufacturer invoices for verification.
5. Denial of Cenvat credit by the Original Authority.
6. Appeal against the order of the Commissioner (Appeals).
7. Failure of authorities to cross-verify relevant data for Cenvat credit.

Analysis:
1. The dispute centered around availing Cenvat credit of AED (GSI) on sugar procured from dealers. The Tribunal acknowledged that AED (GSI) was eligible as Cenvat credit due to a retrospective amendment. The appellants had availed credit based on invoices referencing the manufacturer's invoices, but dealers had not specifically indicated AED (GSI) in their invoices. The Tribunal held that appellants were eligible for the credit based on the retrospective benefit granted, remanding the matter for verification of payment and quantity details.

2. The issue of recognition of supplementary invoices by dealers under Rule 7 of Cenvat Credit Rules was raised. The Tribunal noted that the dealers' invoices, though lacking specific AED (GSI) mention, were to be treated as issued under Rule 11 of Central Excise Rules. It emphasized that the omission of AED in dealer invoices should be viewed in the context of the law at that time, allowing the credit retrospectively. The Tribunal directed the original authority to allow the credit subject to verification.

3. Verification of manufacturer's invoices for AED (GSI) paid was crucial. The Tribunal directed the appellants to submit original invoices of the sugar manufacturer for verification. However, the manufacturer's invoices were not produced, leading to a denial of credit by the Original Authority. The failure to provide these documents hindered the verification process.

4. The failure to provide original manufacturer invoices for verification was a significant setback. The inability to produce these invoices led to the denial of Cenvat credit under dispute, as verification of AED (GSI) payment details became impossible. The Tribunal upheld the decision based on the unavailability of manufacturer invoices.

5. The Original Authority's denial of Cenvat credit was challenged through an appeal before the Commissioner (Appeals). The Commissioner upheld the denial due to the unavailability of manufacturer invoices for verification. The inability to verify the particulars of manufacturer invoices led to the rejection of the plea for credit of AED (GSI).

6. The appeal against the order of the Commissioner (Appeals) highlighted the efforts made by the appellants to provide evidence for verification. The Tribunal noted that while the credit was found admissible subject to verification, the authorities mechanically rejected the credit without adequate cross-verification efforts. The Tribunal set aside the impugned order and allowed the appeal, granting the appellants the Cenvat credit.

7. The failure of authorities to cross-verify relevant data for Cenvat credit was a critical issue. The Tribunal emphasized that the authorities had not made sufficient efforts to verify the details of credit, despite the appellants' submission of necessary information. The lack of adverse report material and possession of proper documents warranted the allowance of the appeal and the entitlement to Cenvat credit.

This detailed analysis reflects the complex legal proceedings and the challenges faced in availing Cenvat credit, emphasizing the importance of proper documentation and verification in such cases.