2023 (1) TMI 801 - AT - Central Excise

Availment and utilization of CENVAT Credit - registration of premises - allegation is that the CENVAT Credit pertained to a period prior to registration and there is no scope for accepting Cenvatable documents which do not bear the name of their factory premises - HELD THAT - The Ld.Adjudicating authority has observed in the Adjudication order where it was held that The noticee pleaded for their invoices with earlier Office address for consideration with judicial decisions. In the said show cause notice it was alleged that invoices were not been consigned to the address (registered address) of the assessee and CENVAT is not admissible in this grounds also. Here I cross-checked their payments and found they have paid amount for the inputs in question. It has been held by the Tribunal High Courts and Supreme Court that substantial benefit should not be denied on the ground of procedural lapses. Further Hon ble High Court of Karnataka in the case of MPORTAL INDIA WIRELESS SOLUTIONS (P.) LTD. VERSUS COMMISSIONER OF SERVICE TAX 2011 (9) TMI 450 - KARNATAKA HIGH COURT where it was held that In the absence of a statutory provision which prescribes that registration is mandatory and that if such a registration is not made the assessee is not entitled to the benefit of refund the three authorities committed a serious error in rejecting the claim for refund on the ground which is not existence in law. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Availment of CENVAT Credit on invoices consigned to a different address.
2. Eligibility of CENVAT Credit prior to registration of manufacturing premises.
3. Failure to produce acceptable documents for receipt and use of input goods.
4. Interpretation of Rule 3(2) of CENVAT Credit Rules, 2004.
5. Consideration of procedural lapses in availing substantial benefits.
6. Requirement of registration for claiming CENVAT credit.

Analysis:
1. The case involved the Appellant, a manufacturer of high security number plates, availing CENVAT Credit based on invoices consigned to their earlier office address instead of the registered manufacturing premises. The Department contended that such credit was not admissible as the invoices did not bear the factory premises' name. The Adjudicating authority upheld this view, leading to a penalty imposition.

2. The Adjudicating authority further emphasized that the Appellant availed CENVAT Credit prior to registration with the central excise authority, which was deemed impermissible. The Ld.Commissioner(Appeals) also noted the absence of documents proving receipt and utilization of the input goods in production, thereby supporting the denial of credit based on pre-registration invoices.

3. Rule 3(2) of the CENVAT Credit Rules, 2004 was invoked to assess the availability of credit on inputs when goods cease to be exempted. The Appellant's failure to provide quantitative details of inputs on the date of dutiable production and delayed credit account maintenance post-registration were highlighted as justifications for disallowing the credit.

4. The Tribunal referenced legal precedents emphasizing that procedural lapses should not result in denying substantial benefits. Citing a judgment by the Hon'ble High Court of Karnataka, the Tribunal stressed that the absence of a statutory provision mandating registration as a condition for claiming CENVAT credit rendered the denial of benefits on such grounds legally untenable.

5. Considering the settled legal principles and the precedents cited, the Tribunal concluded that the impugned orders disallowing the CENVAT Credit could not be sustained. Consequently, the Appeal was allowed, providing the Appellant with consequential relief in accordance with the law.

This detailed analysis of the judgment highlights the key issues addressed, the legal interpretations made, and the precedents relied upon to arrive at the final decision in favor of the Appellant.