Appellant wins appeal for Cenvat Credit on disputed invoices from subsidiary companies

The appeal was allowed, granting the appellant entitlement to take Cenvat Credit on disputed supplementary invoices from subsidiary companies of Coal India Ltd. The Member (Judicial) noted that the confusion stemmed from similar issues pending before the Apex Court and that failure to ascertain the exclusion clause did not imply suppression or collusion. Given the absence of evidence indicating fraud or suppression and considering a precedent involving South Eastern Coalfields Ltd., the appellant was permitted to avail the Cenvat Credit, leading to the setting aside of the original order and granting consequential relief.

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Issues: Appeal against denial of Cenvat Credit based on supplementary invoices.

Analysis:
1. The appellant, a manufacturer of cement and clinker, availed Cenvat Credit on duty paid on inputs, capital goods, and input services under Cenvat Credit Rules, 2004. The Department alleged that the appellant took Cenvat Credit based on supplementary invoices from subsidiary companies of Coal India Ltd., which included differential excise duty for various charges. The demand was confirmed by the Original Adjudicating Authority and upheld by the Commissioner (Appeals), leading to the present appeal.

2. The appellant argued that similar cases were decided in their favor by the Tribunal in other matters, citing precedents such as Birla Corporation Ltd. and Jaypee Sidhi Cement. They contended that Rule 9 (1) (b) of CCR 2004 was not applicable in their circumstances, especially since the main issue was pending before the Apex Court. The appellant sought allowance of the appeal based on these arguments.

3. The Department rebutted the appellant's arguments by emphasizing Rule 9 (1) (b) and the appellant's responsibility to ensure compliance with exclusion clauses. They asserted that the appellant's failure to ascertain the nature of the supplementary invoices could indicate suppression or collusion. The Department requested the appeal to be rejected based on these grounds.

4. Upon considering the arguments from both parties and reviewing the precedents cited, the Member (Judicial) observed that similar issues regarding Cenvat Credit on supplementary invoices from Coal Companies were pending before the Apex Court. The Member noted that confusion existed due to the sub-judice nature of the matter, and mere failure to ascertain the exclusion clause of Rule 9 (1) (b) did not amount to suppression or collusion by the appellant. Additionally, since the supplementary invoices were issued by government undertakings, there was no presumption of suppression or collusion without evidence to the contrary.

5. Referring to a Tribunal decision involving South Eastern Coalfields Ltd., where no fraud or suppression was found, the Member allowed the appeal and granted the appellant the entitlement to take Cenvat Credit on the disputed supplementary invoices. Consequently, the order under challenge was set aside, and the appeal was allowed with consequential relief to the appellant.

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