2024 (3) TMI 489 - AT - Central Excise

Reversal of CENVAT Credit - duty paying document - reversal sought on the ground that while WCMIL was not eligible to take Cenvat credit as the same was imported by M/s. Neo Metaliks Limited (NML) who had paid the CVD - it is alleged that invoice issued by WCMIL is not a proper document for availing the Cenvat credit - HELD THAT - If the department had any dispute that WCMIL was not eligible to take Cenvat credit of the CVD paid by NML, it was for the Department to initiate action against WCMIL. From the appellant s side, they have received the invoices from WCMIL and after finding that Excise Duty payments have been properly recorded in the invoices, they have taken the Cenvat credit. After converting the cooking coal to Metcoke, treating this activity not as a mere job work, but as a jobwork amounting to manufacture, they have paid the Excise Duty on the finished goods by way of PLA and RG-23A part-II as recorded by the Commissioner(Appeals). There are no reason to interfere with the considered order passed by the Commissioner(Appeals) - appeal of Revenue dismissed.

Summary

Issues involved:
The issues involved in this case are the eligibility of taking Cenvat credit on imported goods, the validity of tax invoices for availing Cenvat credit, and the responsibility of the buyer in verifying excise duty payments by the supplier.

Eligibility of Cenvat credit:
The appellant undertook job-work on imported cooking coal to produce Metcoke, receiving goods from M/s. Wellman Carbo Metalicks (WCMIL) who issued tax invoices showing Excise Duty paid. The Department demanded reversal of Cenvat credit, arguing that WCMIL was not eligible to take the credit as the goods were imported by M/s. Neo Metaliks Limited (NML) who paid the CVD. The adjudicating authority confirmed the demand, leading to an appeal by the appellants.

Validity of tax invoices:
The Commissioner(Appeals) considered the appellant's contention that they took credit on Hard Coking Coal based on invoices issued by WCMIL under Rule 11 of Central Excise Rules. The appellant believed WCMIL, as a coke manufacturer, imported the coal and paid duty equivalent to the Cenvat credit availed. The Commissioner found that the credit was taken and utilized based on genuine invoices issued by WCMIL, containing all required details under Rule 11 of CER. The appellant acted with diligence in their dealings and were entitled to assume duty payment based on the invoices received.

Responsibility of the buyer:
The Tribunal noted that if the Department disputed WCMIL's eligibility for Cenvat credit, it should have taken action against WCMIL. The appellant received proper invoices from WCMIL with recorded Excise Duty payments, leading them to take Cenvat credit. After converting the coal to Metcoke and paying Excise Duty on the finished goods, the Tribunal upheld the Commissioner(Appeals)'s order, stating that the appellant acted appropriately in the circumstances. Consequently, the Tribunal dismissed the Revenue's appeal.