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2018 (2) TMI 131 - AT - Central ExciseCENVAT credit - duty paying documents - Revenue was of the view that the invoices not having been issued by a registered dealer, are not the proper documents under Rule 9 of Cenvat Credit Rules - capital goods - Held that: - there is no dispute that M/s Chemicals Sales was not registered with the Central Excise Department as first or second stage dealer during the impugned period. The law is clear under Rule 9 of Cenvat Credit Rules, 2004 that the invoice should be issued by a manufacturer, an importer or a first/second stage dealer. If the invoice was not issued by any of the above categories, the same cannot be considered as a valid document in eyes of law and the Cenvat credit taken on the basis of such a document is irregular and inadmissible - If the department starts accepting the invoices issued by a trader, who is not a registered dealer, it will create chaos in the Cenvat credit system and there will be flagrant misuse of the said scheme, which is a facility to present cascading effect of taxes. Time limitation - penalty - Held that: - appellants while declaring availement of Cenvat credit in the ER-1 returns have misstated the facts because the invoices, on which they had availed Cenvat credit, were not issued by a manufacturer/importer/registered dealer thereby resulting in availment of irregular and fraudulent credit. As a result, they had mis-declared the availment of Cenvat credit - extended period and penalty rightly invoked. CENVAT credit - capital goods - Revenue is of the view that the same are the capital goods and hence the appellant no.1 should have taken Cenvat credit to the extent of 50% of the duty paid on such capital goods - scope of SCN - Held that: - since the credit held inadmissible to them in the first year, was available to them in the succeeding years. I observe that the issue is not covered by the show cause notice. However, the appellants no.1 are at liberty to avail admissible credit and needs no approval - the order of Commissioner (Appeals), in so far as it relates to the irregular credit of ₹ 53,005/-, is set aside and the matter is remanded back to Commissioner (Appeals) to pass a fresh order after giving fair opportunity to the appellants to defend their case - Matter on remand. Appeal disposed off.
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