2019 (5) TMI 1614 - AT - Central Excise

CENVAT Credit - duty paying documents - supplementary invoices raised against the original invoices issued by the subsidiary companies of Coal India Ltd. i.e. M/s. South Eastern Coal Limited - suppression of facts - HELD THAT - Tribunal in connected matter of ULTRA TECH CEMENT LTD UNIT ADITYA CEMENT WORKS VERSUS CE ST-UDAIPUR 2018 (8) TMI 952 - CESTAT NEW DELHI wherein the pendency of similar matter before the Hon ble Supreme court in the case of South Eastern Coal Fields Ltd. and ors. and also of other cases, referred to in the above case, has been considered and it is held that it is an admitted position that demand raised by the department against M/s. SECL is under challenge before the Hon ble Supreme Court and therefore the cenvat credit can be availed by the manufacturer on the strength of supplementary invoice as such amount of duty cannot be said to be paid on account of any non levy or short levy by reason of fraud, collusion or any wilful mis- statement or suppression of facts or contravention of any provision of the Central Excise Act/ Rules with intent to evade payment of duty. The appellant is entitled to take CENVAT credit on the supplementary invoices in question - Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Availing cenvat credit on supplementary invoices issued by subsidiary companies.
2. Allegation of additional consideration received by the subsidiary companies.
3. Violation of Rule 9 (1) (b) of Cenvat Credit Rules.
4. Applicability of cenvat credit based on the pendency of similar matters before the Hon'ble Supreme Court.

Analysis:
1. The appellant, a manufacturer of Aluminium, availed cenvat credit on supplementary invoices issued by subsidiary companies of Coal India Ltd. The Preventive Branch alleged additional consideration received by the subsidiary companies, leading to a demand for disallowance and recovery of wrongly availed cenvat credit. The Order-in-Original confirmed this proposal, prompting the appellant to appeal before the Tribunal.

2. The appellant argued that the main issue of valuation is pending before the Hon'ble Apex Court and cited previous decisions in their favor. They contended that similar matters have been decided in favor of appellants, emphasizing that their case aligns with those decisions, seeking allowance of the appeal.

3. The Department argued that the pendency of adjudication against the subsidiary companies before the Hon'ble Apex Court should not be the sole basis for allowing the appeal. They asserted that there is sufficient evidence to establish a violation of Rule 9 (1) (b) of Cenvat Credit Rules, indicating the appellant's failure to ascertain the absence of misconduct or suppression of facts.

4. The Tribunal considered previous decisions, including one involving Ultra Tech Cement Ltd, where it was held that cenvat credit can be availed based on the pendency of similar matters before the Hon'ble Supreme Court. Referring to another case involving M/s. Birla Corporation Ltd, the Tribunal emphasized the absence of fraud and suppression, allowing the appeal and granting the appellant entitlement to cenvat credit on the supplementary invoices.

5. Consequently, based on the precedent set by previous decisions and the recurring nature of the issue, the Tribunal set aside the impugned order and allowed the appeal, affirming the appellant's right to take cenvat credit on the supplementary invoices in question.