2013 (4) TMI 406 - AT - Central Excise

Tribunal overturns Commissioner's decision on cenvat credit eligibility, highlighting importance of substance over form.

Sanathan Textiles P. Ltd. Versus CCE, Vapi

The Tribunal allowed the appeal, setting aside the earlier order of the Commissioner (A), regarding the admissibility of cenvat credit based on a ... Cenvat credit admissibility on the basis of invoice on which serial number is hand-written - Held that:- There is no dispute that the inputs were duty paid and duly received by the appellant and used in the manufacture of excisable goods. If there was any discrepancy, the same could have been verified from the suppliers end by the jurisdictional Central Excise officers. The appellant has got such a certificate from the supplier of the inputs with a certification of the jurisdictional Superintendent confirming that the invoices stated in the letter dated 10/10/2011 of the supplier are checked from the records. This argument was taken up by the appellant before the original adjudicating authority, but no findings were given by the lower authority as to why verification made by the jurisdictional Central Excise authority of the supplier cannot be accepted. The judgment of the Commissioner, Central Excise vs. Chandra Laxmi Tempered Glass Co. Pvt. Ltd. [2008 (7) TMI 257 - HIMACHAL PRADESH HIGH COURT], relied upon by the A.R. is not applicable because the same was pronounced with respect to Rule 57G of the earlier Central Excise Rules, 1944 when there was a specific obligation under Rules 52A to have serially printed invoices. It is once again emphasized that substantial benefit cannot be denied to the assessee on the basis of procedural irregularity when under the new Central Excise Rule 11, there is no obligation of printed serial number on the invoices. Accordingly, the appeal of the appellant is allowed. Issues:Admissibility of cenvat credit based on hand-written serial number on invoice.Analysis:The appellant filed an appeal against the rejection of their appeal by the Commissioner (A) regarding the admissibility of cenvat credit based on a hand-written serial number on an invoice. The appellant argued that the current Central Excise Rules do not mandate a specific mention of a printed serial number on the invoice, unlike the earlier rules. They presented a letter from the supplier, countersigned by the Central Excise Superintendent, confirming the issuance of invoices after discharging central excise duty. The appellant also highlighted the provision for rectification of discrepancies by the Central Excise authority. The appellant relied on a Tribunal judgment in a similar case to support their argument.The respondent, on the other hand, referred to a judgment by the High Court of Himachal Pradesh in a different case. The main issue to be decided was whether an invoice with a hand-written serial number could be considered a valid document under Rule 11(2) of the Central Excise Rules, 2001. Rule 11(2) specifies the requirements for an invoice, including being serially numbered. The Tribunal noted the absence of a specific requirement for a printed serial number on invoices under the current rules, unlike the earlier rules. The Tribunal emphasized that substantial benefits should not be denied to the assessee due to procedural discrepancies.The Tribunal found that there was no dispute regarding the duty payment and receipt of inputs by the appellant for manufacturing excisable goods. The appellant had obtained a certificate from the supplier, verified by the jurisdictional Superintendent, confirming the authenticity of the invoices. The Tribunal observed that the lower authority had not provided reasons for rejecting the verification by the supplier's Central Excise authority. The Tribunal distinguished the case cited by the respondent, noting the change in rules regarding printed serial numbers on invoices. Consequently, the Tribunal allowed the appeal, setting aside the earlier order of the Commissioner (A).