2023 (3) TMI 1370 - AT - Central Excise

Tribunal allows Cenvat Credit claim based on invoices from second stage dealer

The Tribunal allowed the appeal of M/s. S. S. Engineering Works, holding them eligible for Cenvat Credit based on invoices received from M/s. Roshanlal ... Cenvat credit admissibility where consignee is shown on the invoice - Validity of dealer/agent invoices as documents for availing Cenvat credit - Requirement of physical receipt and accounting of inputs for Cenvat credit - Application of Rule 7(1) of the Cenvat Credit Rules, 2002 to dealer invoices - Reliance on precedential Tribunal decisions on dealer-consignee invoice structureCenvat credit admissibility where consignee is shown on the invoice - Validity of dealer/agent invoices as documents for availing Cenvat credit - Requirement of physical receipt and accounting of inputs for Cenvat credit - Application of Rule 7(1) of the Cenvat Credit Rules, 2002 to dealer invoices - Reliance on precedential Tribunal decisions on dealer-consignee invoice structure - Appellant entitled to Cenvat credit though invoices show vendor's agent as the buyer and the appellant as consignee, where goods were received and accounted for by the appellant and invoice contained appellant's details. - HELD THAT: - The Tribunal found that the invoices, while showing the vendor's agent as the buyer, nevertheless prominently recorded the appellant as consignee with ECC number and range/division details, and the goods were physically received at the appellant's factory and recorded in their RG-23/books of account. Relying on the principle that invoices issued by a first- or second-stage dealer are valid documents for taking Cenvat credit and on prior Tribunal precedents (notably Kunststoff Polymers Ltd.) which held that mere mention of the dealer or the words 'on account of the dealer' does not invalidate invoices where the inputs are directly received by the user, the Tribunal held that such invoices cannot be treated as ineligible merely because they name an agent as the buyer. Applying the reasoning of those precedents and Rule 7(1) of the Cenvat Credit Rules, 2002, and on the facts that the co-relation between goods invoiced and goods received was established by accounting records, the impugned denial of credit was unsustainable. [Paras 6, 7]Appeal allowed; appellant held eligible to take the Cenvat credit with consequential relief.Final Conclusion: The Tribunal allowed the appeal and granted Cenvat credit to the appellant, holding that invoices showing the vendor's agent as the buyer do not bar credit where the consignee is shown, the goods were received and properly recorded, and precedents apply. Issues Involved:1. Eligibility of the Appellant to take Cenvat Credit based on the nature of the invoices received from the supplier.The Appellant, M/s. S. S. Engineering Works, procured inputs from M/s. Roshanlal Bhagirathmal, with the Excise Duty shown in the invoices taken as Cenvat Credit. The Department issued a Show Cause Notice alleging that the Appellant was not eligible to claim Cenvat Credit due to discrepancies in the invoices. The Appellant contended that their name was prominently listed as the Consignee in the invoices, and the goods were received and accounted for in their records. The Appellant relied on the case law of Kunststoff Polymers Ltd. Vs. Commr. of C. Ex., Bhopal-2009, where a similar issue was decided in favor of the Appellant. The Appellant argued that internal arrangements with the vendor led to the agent's name being listed as the buyer on the invoices. The Authorized Representative for the Department reiterated the Lower Authorities' findings that the Appellant was not the buyer as per the invoices.The Tribunal examined the records and noted that the goods were received by the Appellant in their factory premises, with all details, including the Appellant's ECC Number, clearly mentioned in the invoices. Citing the case of Kunststoff Polymers Ltd. Vs. Commr. of C. Ex., Bhopal-2009, the Tribunal emphasized that the mention of the customer's name and the consignee on the invoices does not invalidate the document for claiming Cenvat Credit, especially when the goods were directly received by the user. Relying on previous judgments, the Tribunal held that as the goods were received directly by the Appellant from a second stage dealer, the invoices were valid for claiming Cenvat Credit. Therefore, the Tribunal allowed the appeal, stating that the Appellant was eligible for the Cenvat Credit based on the circumstances of the case, in line with the precedent.(Dictated and pronounced in the open court.)