Import of spares by post parcel.

[SANJEEV JADHAV]

Dear Sir, we have imported some spares by post parcel and we have received the same. Post office has given xerox of 'receipt to be signed by address' form, on which total duty was shown (Including all, BCD, ADDL. CESS ETC) and total duty is approximately 21000/-. I wish to take cenvat credit of the same. What document we required to get from post office for availing cenvat credit. Can we take cenvat credit on the xerox form received from post office. Please clarifiy, your kind co-operation in this regard is highly appreciated.

[YAGAY andSUN]

Yes, you can avail the CENVAT credit on the Photocopy of the document received from post office.

Please note ' XEROX' is a Brand Name.  Kindly use word 'Photocopy' instead of word 'XEROX'.

[JAMES PG]

As per Rule 9(1) d of Cenvat Credit Rules, a Certificate issued by the appraiser of Customs in respect of goods imported through Post is the document eligible for Cenvat Credit. If you are taking credit on the basis of any other document, credit is liable to be disallowed.

[CASeetharaman KC]

Following is the List of Documents on which Cenvat Credit can be taken:

As specified in Rule 9 of the Cenvat Credit Rules, 2004, the CENVAT credit shall be taken by the manufacturer or the provider of output service or input service distributor, as the case may be, on the basis of any of the following documents, namely :-

(a)        Invoice issued by a Manufacturer or an importer or a first stage dealer or a second stage dealer; or

(b)        Supplementary invoice, issued by a manufacturer or importer or a supplementary invoice,bill or challan issued by a provider of output except where the additional amount of duty/ tax became recoverable from the provider of service on account of non-levy or non-payment or short-levy or short-payment by reason of fraud or collusion or willful mus-statement or suppression of facts, etc.

(c)        Bill of entry; or

(d)        Certificate issued by an appraiser of customs in respect of goods imported through a Foreign Post Office; or

(e)        Challan evidencing payment of service tax, by the service recipient as the person liable to pay service tax; or

(f)        Invoice, a bill or challan issued by a provider of input service on or after the 10th day of, September, 2004; or

(g)        Invoice, bill or challan issued by an input service distributor under rule 4A of the Service Tax Rules, 1994.

However in reality some of these documents are difficult to get as is the case with Post Office. The Bombay Tribunal has decided in the case of Commissioner of Central Excise, Kolhapur Versus Shah Precicast (P) Ltd.   (2011 (4) TMI 292 - CESTAT, MUMBAI)= [AIT-2012-292-CESTAT] that CENVAT can be taken on the basis of photocopy of Bill of Entry.You can take credit and to play it safe please apply to the Appraiser of Customs for a Certificate for the duty paid. You may enclose a copy of the duty paying document which the Post office has given you. There are two other cases also on which the respondents in the above case relied upon. The cases are as listed below:

• CCE v. Vikrant Tyres [2005 STT 189 (CESTAT)]
• Bombay Goods Transport Association v. UOI  (1993 (12) TMI 71 - HIGH COURT OF JUDICATURE AT BOMBAY)=[1995 (77) E.L.T. 521 (Bombay HC DB]

In the above case The Hon’ble CESTAT observed that the respondents have made efforts to obtain certified copy of the bill of entry . Further it is not disputed that the goods have suffered duty and they have been used in the manufacture of final product. Hence, the CESTAT concluded that substantial benefit cannot be denied on the basis of mere technical violation and rejected the appeal of the Revenue and decided the case in favor of the respondent. 

[JAMES PG]

There are several judgements of Tribunals, High Courts and Supreme Court holding that credit against photocopy and non specified documents in Credit Rules  is not eligible. It is desirable to get the specified documents for availing credit as the Dept will dispute such credits  and  will go for further review and appeal. The cost of litigation  and  penal interest for the adjudication proceedings may be higher than the credit amount. Given below are few among the judgements which held that such credits are not eligible.

CCE , Surat Vs Sarvoday Blending Pvt Ltd  (2012 (9) TMI 741 - CESTAT, AHMEDABAD) = (2012 (278) E.L.T. 373 (Tri. - Ahmd.)

Credit can be taken on the basis of documents listed in Rule 9 of Cenvat Credit Rules, 2004 Credit not available on photocopy of bill of entry

Ceat Ltd Vs CCE, Mumbai III (2007 (10) TMI 54 - CESTAT, MUMBAI) = (2008 (222) E.L.T. 120 (Tri. - Mumbai)

Credit availed based on photocopy of Bill of Entry for goods cleared through courier - Departmental instructions providing for credit based on certificate by customs appraiser for goods imported through foreign post office. Credit denial upheld

S.K.Foils Ltd. v. Commissioner (2009 (1) TMI 176 - PUNJAB AND HARYANA HIGH COURT)= 2009 (239) E.L.T. 395 (P & H) &

S.K. Foils Ltd. v. Commissioner - 2010 (252) E.L.T. A100 (S.C.)]

Laying down blanket principle permitting Modvat credit on carbon copy may result in false claims and many persons may avail credit against one transaction, highly damaging to revenue

Union of India Vs Marmagoa Steel Ltd (2008 (7) TMI 95 - SUPREME COURT )= (2008 (229) E.L.T. 481 (S.C.)

Credit is eligible only against triplicate copy of Bill of Entry

Crompton Greaves Ltd Vs CCE, Gwalior (2006 (1) TMI 361 - CESTAT, NEW DELHI) =(2006 (198) E.L.T. 255 (Tri. - Del.)

Credit taken not based on triplicate Bill of Entry- Imposition of penalty upheld.

“The penalty imposed was only of Rs. 30,000/- (Rupees thirty thousand only) while under Rule 173Q, penalty upto three times of the value of excisable goods could have been imposed”

[YAGAY andSUN]

 Assessee can avail CENVAT credit on the strength of xerox copy.

Substantial benefit cannot be denied on the basis of mere technical violation. In this case, the respondents have made effort to obtain certified copy of the bill of entry which was also denied to them. Further it is not disputed that the goods have not suffered duty and they have not been used in the manufacture of final product. Therefore, the respondents are entitled for CENVAT credit availed by them on the strength of xerox copy. Accordingly, The Hon’ble Tribunal does not find any infirmity with the impugned order and the same is upheld. Appeal filed by the Revenue is rejected.

Commissioner of Central Excise,Kolhapur v.ShahPrecicast (P.) Ltd. 

AI Summary

Cenvat credit documentary compliance: credit depends on Rule 9 documents and customs appraiser certificate for post imports. Availability of CENVAT credit for goods imported through foreign post depends on documents listed in Rule 9 of the Cenvat Credit Rules, 2004, notably invoices, bill of entry and a certificate issued by the customs appraiser for post imports. Judicial authority is divided: some tribunals have permitted credit on photocopies where originals were unobtainable, while other tribunals, high courts and the Supreme Court have required specified originals and denied credit on photocopies. To minimize risk, obtain the customs appraiser's certificate or the Rule 9 specified originals before claiming credit.