Tribunal overturns Commissioner's decision denying Cenvat Credit to agricultural machinery exporter

The Tribunal allowed the appeal, setting aside the Commissioner's order disallowing Cenvat Credit to the manufacturer exporter of agricultural machinery. The appellant's receipt of goods directly at their site was supported by relevant circulars, demonstrating compliance with the rules. As the appellant had accounted for the goods in their records, with evidence of payments and transportation, and there was no proof of non-receipt of goods, the denial of Cenvat Credit was deemed unjustified. Previous Tribunal decisions also supported this conclusion.

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Issues:
The case involves the disallowance of Cenvat Credit by the Adjudicating Authority, imposition of penalty, and demand for interest under Rule 15(2) of Cenvat Credit Rules 2004.

Details:
The appellant, a manufacturer exporter of agricultural machinery, availed Cenvat Credit based on invoices issued by a registered dealer through unregistered dealers for raw materials. The department alleged that the appellant did not receive the goods but only the invoices, contravening the Act and Rules.

The department contended that the appellant unlawfully benefited from cenvatable invoices without actual receipt of goods, invoking an extended period of limitation. However, the appellant argued that they received the goods directly at their site, supported by Board's Circular No. 1003/10/2015-C, which allows credit based on invoices issued by the registered dealer.

The Circular aimed to facilitate direct transport of goods from manufacturer to consignee, eliminating the need for goods to pass through registered dealers. The appellant also cited Circular No. 218/52/96-CX regarding transit sale movement of goods under Rule 52-A invoice.

The Tribunal found that the appellant had accounted for the impugned goods in their records, with evidence of payments and transportation details. As there was no proof of non-receipt of goods and the appellant had not disputed actual production of goods, the Cenvat Credit could not be denied. Previous Tribunal decisions supported this stance, leading to the appeal being allowed and the Commissioner's order set aside.

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