2018 (3) TMI 547 - AT - Central Excise

Tribunal Grants Appeal on Cenvat Credit Compliance Case

M/s Badrinarain Alloys & Steels Ltd., Shri N.H. Gupta, Director Versus Commr. of Central Excise, Haldia

M/s Badrinarain Alloys & Steels Ltd., Shri N.H. Gupta, Director Versus Commr. of Central Excise, Haldia - TMI Issues:- Incorrect availment of Cenvat Credit- Compliance with Cenvat Credit Rules- Evidence of receipt and utilization of inputs- Compliance with Rule 9(3) of Cenvat Credit Rules- Reliance on legal precedents for Cenvat Credit availmentAnalysis:1. Incorrect availment of Cenvat Credit:The case involved the appellant being accused of wrongly taking and utilizing Cenvat Credit during a specific period based on invoices issued by a supplier. The Department alleged a contravention of Rule 15(2) of the Cenvat Credit Rules, 2004. A show-cause notice was issued, demanding the credit availed along with interest and penalty. The Adjudicating Authority confirmed the demand, which was upheld by the Commissioner (Appeals), leading to the appeal before the Tribunal.2. Compliance with Cenvat Credit Rules:The appellant contended that they had procured iron and steel scraps from the supplier, and despite allegations against the supplier's infrastructure, they had duly discharged duty on the goods received and recorded them in their statutory records. The Tribunal noted that the appellant's records were subject to scrutiny by Central Excise Officers, and the credits were availed with the knowledge of the Revenue. The appellant's Director confirmed the receipt of supplies under proper documentation, including excise invoices and VAT declarations.3. Evidence of receipt and utilization of inputs:The Tribunal observed that the inputs received by the appellant were duly recorded in their records, and the final products were manufactured using these inputs, which were cleared after payment of duty. There was a lack of evidence from the Revenue regarding the source of such a significant quantity of inputs used in the manufacturing process. The appellant's compliance with Rule 9(3) of the Cenvat Credit Rules, regarding knowing the supplier's identity, was also noted.4. Compliance with Rule 9(3) of Cenvat Credit Rules:The Tribunal found that the appellant had fulfilled the requirement of Rule 9(3) by acquainting themselves with the supplier's identity through proper documentation. By referencing the supplier's address and registration number, the appellant was deemed to have known their dealer, as required by the rule.5. Reliance on legal precedents for Cenvat Credit availment:The Tribunal cited legal precedents, including decisions by the Hon'ble Jharkhand High Court and various Tribunal cases, to support the appellant's claim for Cenvat Credit. These precedents emphasized that the buyer could claim credit on inputs if payments were made, and the credit would be available even in cases of invoices issued by registered dealers involved in fraudulent transactions. Based on these discussions and legal precedents, the Tribunal set aside the impugned order and allowed both appeals in favor of the appellants.