Tribunal Upholds Deemed Cenvat Credit Order

The Tribunal upheld the order allowing the Respondent's appeal for deemed Cenvat credit under Rule 9A of Cenvat Credit Rules, 2004. The Revenue's appeal was dismissed as the Respondent complied with the necessary declaration requirements under Rule 9(2) of Central Excise Rules, 2002. The Tribunal clarified that no specific documents were required for deemed credit under Rule 9A(2), and the Respondent's method of availing credit did not violate the rule. Therefore, the Respondent was entitled to the entire credit for stock as of 31-3-2003, and the Revenue's appeal was rejected.

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Issues:
Deemed Cenvat credit under Rule 9A of Cenvat Credit Rules, 2004

Analysis:
The appeal was filed by the Revenue against the Order of the Commissioner (Appeals) where the Respondent's appeal was allowed. The Respondent had claimed deemed Cenvat credit for stock as of 31-3-2003 under Rule 9A of Cenvat Credit Rules, 2004. The adjudicating authority denied the credit stating that the Respondent took credit on their own documents in a piecemeal manner. The Revenue contended that the Respondent availed credit based on their own invoices under Rule 11 of Central Excise Rules, 2002, instead of following the procedure under Rule 9A(3) of Cenvat Credit Rules, 2004.

The Respondent argued that they complied with Rule 9A by filing the necessary declaration as required under Rule 9(2) of Central Excise Rules, 2002. They contended that the reason for disallowing the credit did not align with the provisions of Rule 9(2) or 9(3) of Cenvat Credit Rules, 2002. The Respondent maintained that they were entitled to the deemed credit as they followed the prescribed procedure.

The Tribunal analyzed Rule 9A(2) of Cenvat Credit Rules, 2004, which allows manufacturers, producers, dealers, etc., to avail deemed credit on stock as of 31-3-2003 without requiring actual payment documents. The Tribunal noted that no documents were necessary for deemed credit under this rule. Even though the Respondent had prepared certain documents, it did not violate the conditions of Rule 9A(2). The Tribunal emphasized that the entire credit for stock as of 31-3-2003 was available to the Respondent, regardless of whether it was taken in parts or at once. Therefore, the Tribunal upheld the impugned order, dismissing the Revenue's appeal and disposing of the case.

The judgment was pronounced in court on 31-3-2017 by Shri Ramesh Nair, Member (J) of the Appellate Tribunal CESTAT Mumbai.

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