2018 (3) TMI 682 - AT - Central Excise

Area-based exemption denied: Cenvat Credit appeal dismissed for procedural errors and double benefits

M/s. Montage Enterprises Pvt. Ltd. Versus C.C.E. Indore

The appeal was dismissed by the Tribunal as the appellant, enjoying area-based exemption in Haridwar, was found ineligible to claim Cenvat Credit on the ... CENVAT credit - appellant is enjoying area based exemption - endorsement of the vouchers - Held that: - in the CCR 2004 there is no word “endorsement of the vouchers” - raw material was purchased from Noida for Haridwar which was enjoying area based exemption. The goods have reached the appellant destination and the business deal was over - When the appellant is enjoying area based exemption then the Cenvat Credit cannot be given as law does not provide double benefit - appeal dismissed - decided against appellant. Issues:Claim of Cenvat Credit on final product, Area-based exemption, Procedural lapseAnalysis:The appeal was filed against Order-in-Original No. 25/2016 dated 08.09.2016 concerning a dispute from April 2010 to July 2014. The appellant, having a unit in Haridwar, enjoyed area-based exemption under notification no. 50/2003 and had a sister unit in Malanpur. Both units manufactured identical goods, with raw materials purchased in the name of the Haridwar unit from Noida. The goods were then transferred to Malanpur, where the final product was produced. The appellant claimed Cenvat Credit on the final product at Malanpur, which was disallowed, leading to the appeal.During the hearing, the appellant's counsel argued that the raw material reaching Malanpur, where the final product was made, entitled the appellant to the Cenvat Credit since the raw material was duty paid. The counsel acknowledged a procedural lapse but emphasized that justice should prevail. Conversely, the Departmental Representative (DR) supported the impugned order, highlighting that the appellant, enjoying area-based exemption in Haridwar, was not eligible for the Cenvat Credit. The DR pointed out the absence of provisions for endorsing vouchers in the Cenvat Credit Rules 2004.Upon review and considering the submissions, the Tribunal observed that the Cenvat Credit Rules 2004 did not mention 'endorsement of vouchers.' No legal precedent was presented where area-based exemption allowed for claiming Cenvat Credit. As the raw material was purchased for the Haridwar unit under area-based exemption and the business deal concluded upon reaching the destination, any procedural errors were the appellant's responsibility. The Tribunal held that enjoying area-based exemption precluded claiming Cenvat Credit to prevent double benefits, leading to the dismissal of the appeal. The impugned order was upheld, with no grounds for interference identified.In conclusion, the appeal was dismissed, and the decision was pronounced in open court by the presiding officer.