2019 (11) TMI 56 - AT - Central Excise

Tribunal allows CENVAT credit for job workers on imported raw materials without name on duty documents

M/s. Naga Ltd. (Detergents) Versus Commissioner of GST & Central Excise Madurai

M/s. Naga Ltd. (Detergents) Versus Commissioner of GST & Central Excise Madurai - TMI Issues:- Availing CENVAT credit on imported raw materials with Bills of Entry consigned to principal manufacturer.- Validity of availing credit without the appellant's name on the Bills of Entry.- Interpretation of Rule 9 of CENVAT Credit Rules, 2002 regarding mandatory mention of the appellant's name on duty paying documents.- Dispute over eligibility of credit based on Bills of Entry showing principal manufacturer as the importer.Analysis:1. The case involved job workers availing CENVAT credit on imported raw materials using Bills of Entry consigned to the principal manufacturer. The Department contended that since the Bills of Entry were not issued or consigned to the appellant, the credit was invalid as per Rule 9 of the CENVAT Credit Rules, 2002. A Show Cause Notice was issued to disallow the credit and recover the amount with interest and penalty, which was confirmed by the Commissioner.2. The appellant argued that Rule 9(1) of the CENVAT Credit Rules does not specify that the duty paying document must contain the name of the person availing the credit. They emphasized that all necessary particulars for availing credit were present in the Bills of Entry, and the goods were used in manufacturing the final products. The appellant cited relevant case laws to support their position, highlighting that the Bills of Entry were accompanied by a declaration from the principal manufacturer confirming credit utilization by the appellant.3. On the other hand, the Department asserted that mentioning the appellant's name on the duty paying document was a substantial condition for availing credit, which was not fulfilled in this case. They relied on Supreme Court decisions to argue that the non-mention of the appellant's name in the Bills of Entry was not a procedural lapse that could be overlooked.4. The central issue revolved around whether the appellant, as job workers, could rightfully claim credit based on Bills of Entry showing the principal manufacturer as the importer. The Tribunal noted that the appellant had indeed used the inputs in manufacturing final products, and the duty paid status of the documents was undisputed. The critical point was that the Bills of Entry were accompanied by a declaration from the principal manufacturer directing the goods to the appellant's premises for credit utilization.5. After considering the arguments and precedent cases, the Tribunal concluded that the credit availed by the appellant was valid. They highlighted that Rule 9 did not explicitly mandate the mention of the credit availing party's name on the duty paying document. Citing previous judgments, including those upheld by the Supreme Court, the Tribunal ruled in favor of the appellant, setting aside the impugned order and allowing the appeal with any consequential relief.6. In the final decision, the Tribunal found in favor of the appellant, emphasizing that the credit availed by the job workers on imported raw materials through Bills of Entry consigned to the principal manufacturer was eligible. The judgment highlighted the importance of compliance with Rule 9 while affirming the validity of credit utilization based on the specific circumstances and accompanying declarations in this case.