2017 (2) TMI 876 - AT - Central Excise

Tribunal upholds Cenvat credit based on second stage dealer invoices, consignee name requirement clarified.

The Tribunal held that the appellant's availing of Cenvat credit based on invoices from a second stage dealer, even though the input was purchased from ... CENVAT credit - duty paying documents - invoices issued by second stage dealer, however the input was purchased from an agent of said second stage dealer - Held that: - Even if the purchase of the inputs were made by the appellant from an agent of the second stage dealer but duty paying invoices is consigned to the appellant, credit is legally admissible to the appellant - if in the invoices end user’s name is appearing as consignee irrespective of fact that sale purchase transaction is not between the supplier of inputs and the end user, the credit is admissible at the recipient’s end - credit allowed - appeal allowed - decided in favor of appellant. Issues:1. Availment of Cenvat credit based on invoices issued by a second stage dealer.2. Interpretation of Cenvat Credit Rules, 2004 regarding the eligibility of credit.3. Admissibility of credit when the consignee's name is on the invoice.4. Applicability of relevant judgments and circulars in determining Cenvat credit eligibility.Issue 1: Availment of Cenvat credit based on invoices by second stage dealer:The appellant availed Cenvat credit based on invoices issued by a second stage dealer, but the input was purchased from an agent of said dealer. The Revenue contended that since the input was procured from a third stage dealer, Cenvat credit was not available. The adjudicating authority initially upheld the credit availed by the appellant, but the Revenue appealed the decision.Issue 2: Interpretation of Cenvat Credit Rules, 2004:The appellant argued that credit is admissible regardless of the person from whom the input was purchased if the duty-paying documents are consigned to the appellant. The appellant relied on the Cenvat Rules, stating that credit is available on invoices issued by first or second stage dealers, not third stage dealers. The appellant cited various judgments and circulars to support their claim.Issue 3: Admissibility of credit when consignee's name is on the invoice:The appellant's name appeared as the consignee on the invoices issued by the second stage dealer, even though the purchase was made from the dealer's agent. The Tribunal noted that as long as the duty-paying invoices are consigned to the appellant, credit is legally admissible. This position was supported by a Board Circular from 1995, which clarified the conditions under which credit is admissible to the recipient based on the consignee's name on the invoice.Issue 4: Applicability of relevant judgments and circulars:The Tribunal, after considering both parties' submissions, found that the credit availed by the appellant based on invoices from the second stage dealer was valid. Citing the Board Circular and previous judgments, the Tribunal concluded that when the recipient's name appears as the consignee on the invoices, credit is admissible. The Tribunal set aside the impugned order, noting that the issue had been settled by the Board Circular and previous judgments, thereby allowing the appeal.This detailed analysis of the judgment highlights the key legal issues, interpretations of relevant rules and circulars, and the Tribunal's decision based on established legal principles and precedents.