Manufacturer wins cenvat credit case: Judge rules endorsement absence not sole basis for denial.

The judge found in favor of the appellant, a manufacturer of Catalyst and Chemicals, in a case regarding cenvat credit availed on capital goods not endorsed in their favor. Despite the absence of endorsement on bills of entry, the judge noted that the consignee's address matched the appellant's, and the receipt of goods was not disputed. Referring to Rule 9 of the Cenvat Credit Rules, the judge ruled that denial of cenvat credit solely based on endorsement absence was incorrect. As a result, the judge waived the pre-deposit requirement for cenvat credit demand, interest, and penalty, staying the recovery until the appeal's disposal.

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Issues:
Cenvat credit availed on capital goods not endorsed in favor of the appellant, Jurisdictional Asstt. Commissioner's order confirming cenvat credit demand, Commissioner (Appeals) upholding the order, Stay application filed against the order.

Analysis:
The appellant, a manufacturer of Catalyst and Chemicals, availed cenvat credit amounting to Rs.4,82,840/- on capital goods imported by M/s. Johnson Matthey Chemical India (P) Ltd. The department objected to this credit, citing that the bills of entry were not endorsed in favor of the appellant. The jurisdictional Asstt. Commissioner confirmed the cenvat credit demand, imposed interest, and penalty. On appeal, the Commissioner (Appeals) upheld the decision, leading to the current appeal and stay application.

During the hearing, the appellant's counsel argued that the bills of entry clearly showed the consignee's address as the appellant's, the receipt of goods was not disputed, and the cenvat credit was duly declared in the ER-I Returns. The appellant contended that the mere absence of endorsement on bills of entry should not be a reason to deny the credit, citing precedents where similar situations were granted a stay. The departmental representative opposed the stay, emphasizing the lack of evidence regarding the receipt of goods and the appellant's failure to establish a strong prima facie case.

Upon reviewing the submissions and records, the judge noted that while the bills of entry were not endorsed in the appellant's name, the consignee's address matched the appellant's. The judge highlighted that the show cause notice did not dispute the receipt of goods but focused on the endorsement issue. Referring to Rule 9 of the Cenvat Credit Rules, the judge observed that as long as the goods covered by a bill of entry are received by the manufacturer, denial of cenvat credit solely based on endorsement absence would be incorrect. Consequently, the judge found that the appellant had a prima facie case in their favor and waived the pre-deposit requirement for cenvat credit demand, interest, and penalty, staying the recovery until the appeal's disposal.

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