2018 (10) TMI 892 - AT - Central Excise

CENVAT Credit - duty paying documents - Revenue was of the view that the appellant was not entitled to avail the Cenvat Credit for such inputs on the basis of the Transfer Memos - goods transferred from one unit to another and details given in Transfer memo - Held that - The imported ore has been transferred directly to the two manufacturing units of the appellant including Durgapur. The relevant document indicating payment of duty was the bill of entry. Since the entire quantity covered by the bill of entry, has not been moved to one unit, the appellant has issued an internal document termed as transfer memo in which the quantities transferred to Durgapur unit has been indicated. There is no dispute regarding the receipt of such goods in the Durgapur unit or the use of such raw material in manufacture of the final product. Similar case has been considered by the Hon ble Supreme Court in the case of Union of India Vs. Marmagoa Steel Ltd 2008 (7) TMI 95 - SUPREME COURT where the Apex Court has allowed the Cenvat Credit on the basis of the Bill of Entry attached with a delivery challan indicating the quantities. Credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Dispute over availing Cenvat Credit for inputs based on Transfer Memos.

Analysis:
The judgment revolves around the dispute regarding the appellant's entitlement to avail Cenvat Credit for imported raw materials, Manganese Ore, based on Transfer Memos issued for diversion to manufacturing units. The Revenue contended that Cenvat Credit could not be claimed using Transfer Memos, citing Rule 9 of the Cenvat Credit Rules, 2004.

The appellant, engaged in Ferro Alloys manufacturing, argued that the Credit was rightfully availed based on Bills of Entry for raw material clearance, with Transfer Memos merely indicating quantities diverted to specific units. They emphasized the proper receipt and utilization of the raw materials in manufacturing final products, supported by relevant case laws where similar Credit was allowed.

Upon review, the Tribunal noted that the imported ore was directly transferred to manufacturing units, including Durgapur, with Bill of Entry serving as the duty payment document. As the entire quantity covered by the Bill of Entry was not moved to one unit, Transfer Memos were internally issued to specify quantities transferred to Durgapur. There was no dispute regarding receipt or utilization of the raw material in Durgapur unit's production process.

Drawing parallels to a Supreme Court case, the Tribunal highlighted the importance of documents like Bills of Entry for claiming Credit based on duty payment. Considering precedents and the factual context, the Tribunal found merit in allowing the Cenvat Credit availed by the appellant using Bills of Entry and Transfer Memos.

Consequently, the impugned orders disallowing the Credit were set aside, and the appeals were allowed in favor of the appellant, emphasizing the validity of availing Cenvat Credit based on proper documentation and utilization of imported raw materials.