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M/s Automotive Coaches & Components Ltd. Versus Commissioner of Central Excise, Customs, Excise & Service Tax Appellate Tribunal

2015 (9) TMI 724 - MADRAS HIGH COURT

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 reasons. Admittedly, the invoices in question are not in the name of the app .....

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ecific, 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 by the Tribunal correctly.

Extended period of limitation - .....

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ority 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 Raghavan For the Respondent : Mr A P Srinivas ORDER (Judgment of the Court wa .....

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hey 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 credit based on the documents issued by M/s.Volvo and addressed to M/s. .....

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er 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 consignee, description....". Thus, to avail credit, one of the rud .....

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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 were actually received into their factory and used in the manufacture of .....

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sion, 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 any proof been submitted to support the claim that the subject goods we .....

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A(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 penalty of ₹ 10,000/- (Rupees ten thousand only) under sub-rules (1 .....

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nally 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 salvaged from the 8 Nos. of old Flat Bed Trailers so received from Navbharat .....

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s, 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 the very purpose of ensuring that such misuses don't occur. Such c .....

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. 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 the reliance placed by the assessee was not applicable to the facts of .....

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, 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 duty paid as if such goods are received as inputs under the Cenvat Cred .....

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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 agent of the said manufacturer or from any other premises from where the .....

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lant 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 India Pvt. Ltd. which would be covered under Rule 16. I am unable to .....

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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 terms of Rule 7 of CCR. 7. Regarding the issue of time-bar, the learned a .....

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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 the above discussion, I do not find any reason to interfere with the .....

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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 to take cenvat credit of the duty paid, if such goods are received as .....

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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 by the .....

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