Successor entitled to input credit on endorsed invoices; lack of consignee details not a bar

The court held that the respondent, who took over a business unit, was entitled to claim input credit on inputs procured against invoices in the name of the predecessor but duly endorsed in their favor. The judge emphasized that credit can be taken on duty paid inputs received in the factory, and the lack of consignee details on invoices does not negate this right if receipt and duty payment are not in question. Therefore, the court upheld the respondent's claim to input credit, rejecting the Revenue's appeal.

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Issues:
Revenue's appeal against respondent taking input credit without proper permission and against duty paid invoices in the name of predecessor.

Analysis:
The main issue in this case is whether the respondent, who took over a business unit, is entitled to take input credit on inputs procured against Cenvatable invoices/Bills of Entry in the name of the predecessor. The Revenue argued that since no credit was available against these inputs at the time of the unit transfer, the respondent should not be allowed to take the credit without proper permission. However, the respondent contended that they had sought permission from the concerned officer, but it was delayed, and they eventually informed the department before utilizing the credit. The key point of contention was that the invoices were not in the name of the respondent, but they were duly endorsed in their favor.

After considering the submissions, the judge found that the crux of the matter was whether the respondent could claim credit on invoices not in their name but endorsed in their favor. The judge emphasized that under Central Excise law, credit can be taken only on duty paid inputs received in the factory. The judge distinguished this case from a mere transfer of Cenvat credit, as the inputs were procured post the unit takeover. Referring to a precedent, the judge ruled that the omission of consignee details on invoices does not negate the right to claim credit if receipt and duty payment are not in question. Therefore, the judge held that the respondent was entitled to claim input credit on the procured inputs against Cenvatable invoices, as they had received the goods in their factory.

Consequently, the judge upheld the impugned order, rejecting the Revenue's appeal. The decision was based on the principle that the respondent had a valid claim to the input credit under the circumstances presented.

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