2024 (11) TMI 1125 - AT - Central Excise

Recovery of CENVAT Credit with Interest and penalty - duty paying documents - endorsed Bill of entry - valid document for availing cenvat credit as per Rule 9(1) of Cenvat Credit Rules, 2004 or not - HELD THAT - In appellant s own case REMIDEX PHARMA PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, SERVICE TAX AND CUSTOMS, BANGALORE-II 2018 (4) TMI 471 - CESTAT BANGALORE , this tribunal for earlier period observed that ' the impugned order denying the CENVAT credit only on the ground of endorsed Bill of Entry is not sustainable in law.' The impugned orders are set aside and the appeals are allowed.

Summary

Issues:
Entitlement to avail cenvat credit on endorsed Bill of Entry for medicaments manufactured on loan license basis.

Analysis:
The appeals were filed against Orders-in-Original passed by the Commissioner of Central Excise, Bangalore, concerning the availing of cenvat credit on endorsed Bill of Entry for medicaments manufactured under loan license agreements. The appellants had availed cenvat credit against endorsed Bill of Entry by importers, i.e., loan licensors, who supplied raw materials. A show-cause notice was issued alleging that endorsed Bill of Entry cannot be a valid document for availing cenvat credit. The demands were confirmed with interest and penalty, leading to the present appeal.

The main issue was whether the appellants were entitled to avail cenvat credit on endorsed Bill of Entry sent by principal manufacturers on a loan licensee basis. The appellant's advocate argued that the issue had been previously considered by the Tribunal and cited a judgment overruling the denial of cenvat credit based on endorsed Bill of Entry. The advocate highlighted that all materials were received and utilized in the manufacturing process, a fact not disputed by the department.

Referring to a previous judgment in the appellant's own case, the Tribunal held that the assessee could claim cenvat credit based on an endorsed Bill of Entry as long as there was no dispute regarding the duty paid character of inputs and their utilization in manufacturing. The Tribunal emphasized that the denial of cenvat credit based solely on an endorsed Bill of Entry was not sustainable in law. This principle was also supported by a judgment of the Hon'ble Gujarat High Court upheld by the Hon'ble Supreme Court.

Consequently, the impugned orders denying cenvat credit on endorsed Bill of Entry were set aside, and the appeals were allowed with consequential relief, if any, as per the law. The operative portion of the order was pronounced in open court upon the conclusion of the hearing.