Tribunal grants Cenvat credit on invoice after supplier rectifies duty error

The Tribunal allowed the appeal, granting the appellant Cenvat credit on the supplementary invoice. The denial of credit was based on the supplier's duty short payment due to suppression of facts. However, as the supplier promptly rectified the duty discrepancy, the appellant was entitled to the credit. The Tribunal emphasized the transaction was on a job work basis, not involving sale-purchase, supporting the appellant's claim for Cenvat credit.

---

---

Issues: Denial of Cenvat credit on a supplementary invoice due to short payment of duty by the supplier under proviso to Section 11A(1) for suppression of facts.

Analysis:
1. The appellant, engaged in manufacturing excisable goods, availed Cenvat credit on a supplementary invoice issued by M/s. Lotus Chocolate Co. The adjudicating authority disallowed the credit due to duty short paid by M/s. Lotus under proviso to Section 11A(1) for suppression of facts.

2. The appellant contended that as manufacturing was on a job work basis for Cadbury India Ltd, there was no sale of goods, and any duty payable was Cadbury's responsibility. M/s. Lotus rectified the duty discrepancy promptly, paying duty and interest before any notice, indicating no suppression of facts. The Commissioner (Appeals) upheld the duty demand but dropped the penalty under Section 11AC.

3. The Revenue argued that M/s. Lotus had suppressed facts, making the supplementary invoice ineligible for Cenvat credit under Rule 7(i)(b) of the Cenvat Credit Rules, citing relevant case laws.

4. The Tribunal found that the denial of Cenvat credit was based on M/s. Lotus's short payment of duty due to suppression of facts. However, as M/s. Lotus rectified the duty discrepancy promptly, the appellant was entitled to the credit, following the precedent set in the Century Rayon case. The Tribunal also noted that the transaction was on a job work basis, not involving sale-purchase, supporting the appellant's case for Cenvat credit on the supplementary invoice.

5. Consequently, the Tribunal allowed the appeal, granting the appellant Cenvat credit on the supplementary invoice, as the duty discrepancy was promptly rectified by M/s. Lotus, and no suppression of facts was established.

---