Appeal Granted for Cenvat Credit on Supplementary Invoices

The Tribunal allowed the appeal, granting the appellant the benefit of Cenvat Credit on disputed supplementary invoices issued by a coal company. Despite a pending demand against the coal company before the Hon'ble Apex Court, the Tribunal found no suppression or collusion on the part of the appellant, emphasizing the absence of fraud and the recurring nature of the issue. The appellant was deemed entitled to avail the credit, as the unresolved nature of the demand against the coal company indicated a debatable issue of wrong availment.

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Issues involved:
1. Admissibility of Cenvat Credit on supplementary invoices under Rule 9 (1) (b) of Cenvat Credit Rules.

Detailed Analysis:
The judgment deals with the issue of the admissibility of Cenvat Credit on supplementary invoices under Rule 9 (1) (b) of Cenvat Credit Rules. The appellants, engaged in the manufacture of clinker, availed Cenvat Credit based on supplementary invoices issued by M/s. SECL, a coal company. The Department denied the credit, leading to a show cause notice and subsequent confirmation of the denial by the Original Adjudicating Authority and the Commissioner (Appeals). The main contention was whether the appellants were entitled to avail the credit given the pendency of adjudication against M/s. SECL before the Hon’ble Apex Court.

The appellant argued that similar matters had been decided in their favor previously and that the issue of valuation was subjudiced before the Hon’ble Apex Court. They contended that the show cause notice against M/s. SECL should not be the sole criteria for disallowing the credit. On the other hand, the Department argued that the appellant failed to ascertain the absence of misconduct or suppression of facts, as per Rule 9 (1) (b) of Cenvat Credit Rules, especially considering the show cause notice issued to M/s. SECL before the credit availed by the appellant.

The Tribunal observed that the key issue was the entitlement of the appellants to avail Cenvat Credit based on the supplementary invoices from Coal Companies, particularly M/s. SECL. Noting that matters related to SECL were pending before the Hon’ble Apex Court, the Tribunal highlighted the distinction between suppression and confusion. It was emphasized that mere failure to ascertain exclusion under Rule 9 (1) (b) did not amount to suppression or collusion. Moreover, since the supplementary invoices were issued by government undertakings, any presumption of suppression or collusion needed to be rebutted.

Referring to previous Tribunal decisions, the Tribunal found no element of fraud or suppression on the part of the appellant and recognized the recurring nature of the issue. The Tribunal allowed the appeal, stating that the appellant was entitled to take Cenvat Credit on the disputed supplementary invoices. Despite the prior show cause notice to M/s. SECL, the unresolved nature of the demand against SECL and its challenge before the Hon’ble Apex Court indicated that the issue of wrong availment was debatable, absolving the appellant of any suppression.

In conclusion, the Tribunal accepted the appellant’s arguments and allowed the appeal, granting them the benefit of Cenvat Credit on the disputed supplementary invoices.

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