Tribunal rules in favor of electric bulb manufacturer in Cenvat credit dispute

The tribunal ruled in favor of the appellant, a manufacturer of electric bulbs, in a dispute over the denial of Cenvat credit on inputs not physically received at their manufacturing unit in Bhind. Despite the shipping address discrepancy, the tribunal found that the inputs were indeed received and utilized at the Bhind unit, supported by the Chartered Engineer's certification and internal records. The tribunal deemed the denial of credit unsustainable, setting aside the order and allowing the appeal in favor of the appellant.

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Issues:
1. Denial of Cenvat credit on certain inputs due to dispute over receipt at manufacturing unit.

Analysis:
The appellant, engaged in manufacturing electric bulbs, faced a challenge regarding the admissibility of Cenvat credit on inputs not physically received at their manufacturing unit in Malanpur, Bhind (U.P.). The dispute arose when the Commissioner (Appeals) upheld the denial of credit in an order dated 21-12-2015. The appellant contended that the credit was disallowed based on invoices showing the shipping address as their unit in Gwalior, despite the consignee being the manufacturing unit in Bhind. The appellant clarified that the items were shipped to Gwalior due to courier limitations and were later received at Bhind. The Chartered Engineer certified that the inputs were exclusively used at the Bhind unit, supported by material receipt notes.

The appellant's counsel argued that the denial of credit was unjustified as the goods were indeed received by the Bhind unit, despite the shipping address mentioned in Gwalior. The appellant provided substantial evidence, including the Chartered Engineer's certification and internal records, to prove the receipt and utilization of the disputed inputs at the Bhind unit. In contrast, the AR for the respondent contended that the onus was on the appellant to demonstrate the receipt of goods at their manufacturing unit, emphasizing the shipping address discrepancy as a valid reason for denying Cenvat credit.

After considering the arguments and examining the records, the tribunal observed that the consignee's name and address on the invoice clearly indicated the appellant's unit at Bhind, despite the shipment address being mentioned as Maharajpura, Gwalior. The tribunal acknowledged the Chartered Engineer's certification and the appellant's maintained records confirming the receipt of the materials at the Bhind unit. Given the nature of the goods and the absence of separate transport documents or freight payments, the tribunal deemed the denial of credit unsustainable. Consequently, the tribunal set aside the impugned order and allowed the appeal in favor of the appellant.

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