2018 (7) TMI 848 - AT - Central Excise

CENVAT Credit - duty paying documents - denial of credit on the ground that the documents against which they have taken the cenvat credit is not proper document in terms of Rule 9 of the CCR 2004 - Held that - The dealer has charged transportation charges from the appellant on which service tax have been paid. In terms of Rule 3 of Cenvat Credit Rules, 2004, the assessee is entitled to avail cenvat credit of duty paid/service tax paid by them. The appellant has not paid service tax directly to the transporters but the dealer has paid, i.e. charge of transportation of Goods purchased. As the dealer has paid transportation charges and service tax and issued invoices to appellant. On the strength of the invoices issued by the dealer, appellant is entitled to avail the cenvat credit. Therefore, the appellant has correctly availed the cenvat credit on transportation charges on the amount paid by the dealer shown in the invoice issued by the dealer. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against denial of cenvat credit on inward transportation due to improper documents as per Rule 9 of Cenvat Credit Rules, 2004.

Analysis:
The appellants, manufacturers of excisable goods, appealed against orders denying cenvat credit on transportation charges due to improper documentation. The issue revolved around the dealer raising invoices for goods supplied to the appellants, including transportation charges on which service tax was paid. The Revenue contended that since the dealer was not the transporter, the appellants were not entitled to cenvat credit based on the dealer's invoices. Additionally, it was alleged that the appellants, as recipients of transportation services, should have paid service tax directly. Consequently, proceedings were initiated, show cause notices issued, and cenvat credit on transportation service denied, leading to demands, interest, and penalties.

The Tribunal considered the submissions and examined the sample invoice provided by the dealer, which showed transportation charges with service tax paid. Referring to Rule 3 of Cenvat Credit Rules, 2004, the Tribunal noted that the assessee could avail cenvat credit for duty or service tax paid. It was observed that the dealer, not the transporters, paid the service tax and issued invoices to the appellants. As per the invoices, the appellants were entitled to cenvat credit based on the amount paid by the dealer for transportation charges. Therefore, the Tribunal concluded that the appellants had correctly availed cenvat credit on transportation charges as per the invoices issued by the dealer, setting aside the impugned orders for lacking merit.

In conclusion, the Tribunal allowed both appeals, providing consequential relief to the appellants. The judgment highlighted the importance of proper documentation and adherence to the Cenvat Credit Rules, ultimately ruling in favor of the appellants based on the validity of the invoices issued by the dealer for transportation charges with service tax paid.