Tribunal allows appeal, overturns denial of Cenvat Credit under Central Excise Rules

The Tribunal allowed the appeal by M/s. Uni Deritend Ltd., overturning the denial of Cenvat Credit under Rule 16 of the Central Excise Rules. The Tribunal held that goods from any manufacturer by any factory could be brought back for specified purposes, even if not originally manufactured by the receiving factory. It found the Revenue's objections unsustainable, noting that procedural lapses in documentation should not lead to the denial of substantive benefits. The decision was pronounced on 19/9/17.

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Issues:
Denial of Cenvat Credit under Rule 16 of the Central Excise Rules based on goods brought back to a different factory and documents addressed to a different office.

Analysis:
The appellant, M/s. Uni Deritend Ltd., filed an appeal against the denial of Cenvat Credit under Rule 16 of the Central Excise Rules. The appellant had multiple factories and an office, with goods cleared by various factories brought back for remaking at a different factory. The Revenue denied the credit citing that the goods were not originally manufactured by the receiving factory and that the documents were addressed to a different office. The appellant argued that CBEC Circular clarified that goods from any manufacturer by any factory could be brought back for the purpose stated in Rule 16. Additionally, the appellant presented documents showing the endorsement of goods in favor of the receiving factory. The Assistant Commissioner relied on an impugned order and a Trade Notice. The Tribunal noted the CBEC Circular, which allowed the receipt of duty-paid goods in the factory of the manufacturer for specified purposes, even if not manufactured by them. The Tribunal found the first objection of the Revenue unsustainable based on this clarification.

Regarding the second objection, the Tribunal observed that the receipt of goods at the receiving factory was not disputed by the Revenue. Therefore, any discrepancy in the endorsement of documents and the address mentioned was considered a procedural lapse, not substantial enough to deny the Cenvat Credit claim. The Tribunal emphasized that substantive benefits should not be denied for procedural reasons. Consequently, the appeal was allowed, overturning the denial of Cenvat Credit under Rule 16 of the Central Excise Rules. The judgment was pronounced in court on 19/9/17.

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