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2015 (9) TMI 724 - MADRAS HIGH COURT

2015 (9) TMI 724 - MADRAS HIGH COURT - 2015 (325) E.L.T. 842 (Mad.) - Disallowance of CENVAT Credit - availment of cenvat credit on the strength of documents issued by Volvo India Private Limited, consigned to M/s.Nav Bharat Corporation - Held that:- Appellant had availed cenvat credit on the basis of the invoices issued by M/s.Volvo India Pvt. Ltd., consigned to M/s.Nav Bharat Corporation, who in turn, sent the materials to the assessee for remade, refined, reconditioned or for any other reason .....

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taken, should be specific to that consignee. Unless, the invoice is specific, credit should not be availed. Rule 7(1) of the Cenvat Credit Rules, 2002, specifies that the invoice, based on which credit is availed, should be in the name of the person, who availed the credit. In the present case, the invoices in question are not in the name of the appellant. Hence, the appellant is not entitled to avail the credit. Therefore, the Department was justified in reversing the credit, which was affirmed .....

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nufacture of the final products. This finding of the Adjudicating Authority was confirmed by the Commissioner (Appeals) as well as by the Tribunal - no reason to differ with the findings of the Authorities below. We find no question of law much less any substantial question of law arises for consideration in this appeal - Decided against assessee. - Civil Misc. Appeal No. 1277 of 2015, M. P. No. 1 of 2015 - Dated:- 23-7-2015 - R. Sudhakar And K. B. K. Vasuki, JJ. For the Appellant : Mr R Raghava .....

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716.00 of the First Schedule to the Central Excise Tariff Act, 1985. They have availed cenvat credit on the strength of documents issued by Volvo India Private Limited, consigned to M/s.Nav Bharat Corporation. It is stated that the appellant received the material in their factory during the months of January 2002 to August 2002 and availed cenvat credit on different dates on the basis of 8 invoices issued by M/s.Volvo India Pvt. Ltd. 3. Alleging that the appellant had availed ineligible cenvat c .....

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ENVAT Credit Rules, 2002, CENVAT Credit can be taken by the manufacturer on the basis of an invoice issued by a manufacturer, an importer of a first/second stage dealer in terms of the provisions of the Central Excise Rules, 2002. In terms of Rule 11 of the Central Excise Rules, 2002, "no excisable goods shall be removed from a factory or warehouse except under an invoice......" As per sub-rule (2) of this Rule, "The invoice.... shall contain the registration number, name of the c .....

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ed the invoices in questions. I find that M/s.Volvo, the manufacturer have consigned the subject goods to Ms.Nav Bharat, Bangalore. Nowhere in the said invoices I find either mention of M/s.P.L.Haulwel as the consignee nor has any endorsement been made to the effect that the subject goods are actually consigned to them. Also, no documentary proof has been produced either to prove the fact that M/s.Nav Bharat, in turn, have consigned the subject goods to M/s.P.L.Haulwel or, that the said goods we .....

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4. With regard to the contention of the assessee there was no suppression, the Adjudicating Authority observed as follows: "As regards M/s.P.L.Haulwel's contention that there was no suppression, in terms of sub-rule (4) to Rule 7 of the CENVAT Credit Rules, 2004, the burden of proof regarding admissibility of credit lies on the manufacturer availing credit. No proof has been placed before me to show that the Department was aware of the issue during the material period and neither has a .....

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of the CENVAT Credit Rules, 2001/2002 read with proviso to Section 11A(1) of the Central Excise Act, 1944; (ii) I direct recovery of appropriate interest on the erroneous credit availed under Rule 12 of the CENVAT Credit Rules, 2001/2002 read with Section 11AB of the Central Excise Act, 1944; and (iii) I impose a penalty of ₹ 8,34,784/- (Rupees Eight Lakhs thirty-four thousand seven hundred and eighty-four only) under Section 11 AC of the Central Excise Act, 1944. (iv) I also impose a pen .....

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a 3 of the Show Cause Notice: "The assessee had stated that originally M/s.Volvo India during October 1998 and Feb 1999 have manufactured and cleared 8 Nos. of old Flat Bed Trailers on payment of duty of ₹ 1,04,348/- on each of the Trailer valued at ₹ 6,95,652/-. The items were received by the assessee from Navbharat, and they have manufactured 8 Tipping Trailers by using a few materials viz., suspension, Axles, Brakes, Electricals, Wheel Rims and landing Gears which were salvag .....

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the appellant in the year 2002 for salvaging Suspension, Axles, Brakes, Electricals, Wheel Rims and landing gears therefrom and Manufacture of 8 Tipping Trailers thereupon. The appellant had taken credit on the basis of the Volvo invoices of 1998-99 consigned to Nav Bharat in respect of the Flat Bed Trailers, he had received from M/s. Nav Bharat in the year 2002. The procedural safeguards like 'invoice should be in the name of claimant of credit' etc have been built into the system for .....

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g the Orders of LAA and rejecting the appeal. Appeal Rejected." 7. Aggrieved by the same, the assessee pursued the matter once again before the Tribunal. Before the Tribunal, the assessee relied on the Board's Circular No.607/44/2001-CX dated 13.12.2001 and the decision of the Tribunal in the case of Hitesh Plastic Pvt. Ltd. Vs. CCE & CC Vapi - 2009 (243) ELT 419 (Tri.-Ahmd.). The Tribunal on a careful analysis of the submissions and the reliance placed came to the conclusion that t .....

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their factory for being remade, reconditioned under Rule 16 of the CCR, 2002. The relevant portion of Rule 16 of the said Rule reads as under :- Rule 16. Credit of duty on goods brought to the factory. - (1) Where any goods on which duty had been paid at the time of removal thereof are brought to any factory for being remade, refined, reconditioned or for any other reason, the assessee shall state the particulars of such receipt in his records and shall be entitled to take Cenvat credit of the d .....

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t on the basis of documents, which are not prescribed under Rule 7 of the Cenvat Credit Rules, 2002. For the purpose of proper appreciation, Rule 7(1) of CCR is reproduced below :- Rule 7. Documents and accounts. - (1) The Cenvat credit shall be taken by the manufacturer on the basis of any of the following documents, namely :- (a) an invoice issued by - (i) a manufacturer for clearance of - (I) inputs or capital goods from his factory or from his depot or from the premises of the consignment ag .....

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Excise Rules, 2002; 6. In the present case, it is seen that the appellant availed credit on the basis of invoices issued by M/s. Volvo India Pvt. Ltd. consigned to M/s. Nav Bharat Corporation. Admittedly, these invoices are not prescribed under Rule 7(1)(a) of the CCR, 2002. The learned advocate contended that duty paid goods were received by the appellant for being remade, refined, reconditioned or for any other reason from M/s. Nav Bharat Corporation who received the documents from M/s. Volvo .....

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herefore the appellants are not eligible to avail the said credit. The case law relied upon by the learned advocate is not applicable in the present case. In the case of Hitesh Plastic Pvt. Ltd. (supra), the assessee cleared the final product to their customer who rejected the same and the goods were brought back to assessee's factory on their own central excise invoices. In this context, the Tribunal observed that the assessee's own invoice can be considered as duty paid document in ter .....

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ty payment and carry out modifications for converting the trailers as per customer's requirement and return back on payment of duty for the full value of remade trailers. The said letter is silent that the appellant availed credit on the basis of invoices of M/s. Volvo India Pvt. Ltd. It is a clear case that the appellants deliberately suppressed the name of M/s. Volvo India Pvt.Ltd. in their letter to evade payment of duty and extended period of limitation would be applicable. 8. In view of .....

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ices issued by M/s.Volvo India Pvt. Ltd., consigned to M/s.Nav Bharat Corporation, who in turn, sent the materials to the assessee for remade, refined, reconditioned or for any other reasons. Admittedly, the invoices in question are not in the name of the appellant. 11. A plain reading of Rule 16 and Rule 7(1) of the Cenvat Credit Rules, 2002 reveals that the duty paid goods should be received by the assessee for being remade, refined, reconditioned or for any other reason and they are entitled .....

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m by the consignee. Hence, the invoice, on which the credit is taken, should be specific to that consignee. Unless, the invoice is specific, credit should not be availed. Rule 7(1) of the Cenvat Credit Rules, 2002, specifies that the invoice, based on which credit is availed, should be in the name of the person, who availed the credit. In the present case, the invoices in question are not in the name of the appellant. Hence, the appellant is not entitled to avail the credit. Therefore, the Depar .....

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ard to the allegation suppression, the assessee stated as follows: "The SCN seeks to invoke extended period of limitation on the plea that the invoices are not in the name of P.L.HAULWEL TRAILERS had not been brought to the notice in the monthly returns filed. In response to (xi) above, it is submitted, the filing of return is not called into question. Further availability of invoices with the returns is also not called into question. Once details regarding invoice and the credit availed is .....

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