2013 (4) TMI 406 - AT - Central Excise

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

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 - serially numbered invoice - requirement of printed serial number - Rule 11(2) of the Central Excise Rules, 2001 - substantial benefit principle - verification by jurisdictional Central Excise authorityCenvat credit admissibility - serially numbered invoice - requirement of printed serial number - Rule 11(2) of the Central Excise Rules, 2001 - substantial benefit principle - verification by jurisdictional Central Excise authority - Invoice bearing a hand-written serial number satisfies the requirement of being serially numbered under Rule 11(2) and does not preclude admissibility of cenvat credit. - HELD THAT: - Rule 11(2) requires that an invoice shall be serially numbered but does not mandate that the serial number must be printed. The earlier Rule 52A(6) under the Central Excise Rules, 1944 expressly required printed serial numbers; that specific obligation does not exist under the 2001 Rules. Substantial benefit should not be denied to the assessee on mere procedural discrepancies where the inputs are duty paid and received and used in manufacture. Discrepancies in documents can be verified by the jurisdictional Central Excise authority, and the appellant produced a supplier's letter countersigned by the jurisdictional Superintendent certifying that the invoices were checked from records. The authority below failed to record reasons why such verification by the supplier's jurisdictional Central Excise officer could not be accepted. The decision in Commr. of C. Ex. v. Chandra Laxmi Tempered Glass Co. Pvt. Ltd. is distinguishable as it arose under the earlier Rules (including Rule 52A/Rule 57G) which imposed a specific printed-serial-number obligation. Applying these principles, a handwritten serial number on the invoice does not render the invoice non-est in Rule 11(2) or bar cenvat credit where verification corroborates duty payment and receipt. [Paras 4, 5]The appeal is allowed and the order in appeal dated 30/09/2010 passed by the Commissioner (A) is set aside.Final Conclusion: Handwritten serial numbers on invoices do not vitiate entitlement to cenvat credit under Rule 11(2) of the Central Excise Rules, 2001 where duty-paid inputs are received and verification by the supplier's jurisdictional Central Excise authority supports the invoices; appeal allowed and the impugned Commissioner (A) order set aside. 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).