Custom, Excise & Service Tax Tribunal
M/S. Hydro Electro Machinery vs Commissioner Of Central Excise, ... on 13 June, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. II APPEAL NO. E/1497/12 [Arising out of Order-in- Appeal No.BC/175/MUM-III/2012-13 dated 25-7-2012 passed by the Commissioner of Central Excise (Appeals), Belapur] For approval and signature: Honble Mr Ramesh Nair, Member(Judicial) =======================================================
1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : seen
of the Order?
4. Whether Order is to be circulated to the Departmental: Yes
authorities?
=======================================================
M/s. Hydro Electro Machinery
:
Appellant
VS
Commissioner of Central Excise, Mumbai-III
:
Respondent
Appearance
Shri. T.C. Nair, Advocate for the Appellants
Shri. H.M. Dixit, Asstt. Commissioner(A.R.) for the Respondent
CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Date of hearing: 13/6/2016
Date of decision: 13/6/2016
ORDER NO.
The fact of the case is that appellant availed Cenvat Credit on the strength of invoices issued by Second stage dealer, however the input was purchased from an agent of said second stage dealer. The show cause notice was issued wherein it was contended that the firms from whom appellant had purchased inputs are third stage dealer and on procurement of input from third stage dealer, Cenvat credit is not available. Accordingly, the appellant contravened the provisions of Rule 9(1), Rule (2), Rule 9(4) and Rule 9(5) of Cenvat Credit Rules, 2004 inasmuch as appellant was required to purchase the inputs from first stage or second stage dealer and the burden to prove that Cenvat Credit availed by the assessee is correct is on the assessee. The Adjudicating authority, after considering the submissions made by the appellant held that availment of Cenvat credit on the invoices of second stage dealer is correct and accordingly the demand was dropped. Being aggrieved by the Order-in-Original, Revenue filed an appeal before the Commissioner(Appeals), who vide impugned order allowed the appeal of the Revenue therefore appellant is before me.
2. Shri. T.C. Nair, Ld. Counsel for the appellant submits that appellant have availed Cenvat credit on the strength of invoices issued by second stage dealer, in the said invoices appellants name is appearing as consignee therefore irrespective of the person from whom input was purchased but duty paying documents is consigned to the appellant, credit is admissible. The Cenvat rules provides the credit is available on the invoices issued by first stage dealer or second stage dealer. In the present case, credit taken on the invoice which was issued by the second stage dealer and not by third stage dealer, irrespective of purchase was made from agent of the second stage dealer. He submits that the issue is no more res integra as the same has been decided in various judgments and also by way of clarification in circular which are referred below:
(a) Commr. Of C. Ex. Ahmedabad-II Vs. Transformers & Rectifiers (India) Ltd[2012(281) ELT 670(Guj)]
(b) Kunststoff Polymers Ltd Vs. Commissioner of C. Ex. Bhopal[2009(247)ELT 546(Tri. Del.)]
(c) CBEC Circular No. 218/52/96-CX dated 4-6-1996 on Modvat on transit sale.
(d) Relevant text of CBEC Circular No. 96/7/95-CX dated 13-2-1998 on transit sale.
3. Shri. H.M. Dixit, Ld. Asstt. Commissioner(A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order.
4. On careful consideration of submissions made by both sides, I find that invoices on which Cenvat credit was availed were admittedly issued by second stage dealer and the name of the appellant is appearing on the said invoices as a consignee of the goods. As per the invoices, buyer of the goods was the agent of the second stage dealer who supplied the inputs. Even if the purchase of the same inputs were made by the appellant from an agent of the second stage dealer but duty paying invoices is consigned to the appellant, credit is legally admissible to the appellant. This position has been clarified by the Board Circular way back in 1995 vide Circular No. 96/7/95-CX dated 13-2-1998. Relevant para of the circular is reproduced below:
1. A registered person places an order on a manufacturer for supply and delivery of goods directly to a consumer and the goods are accordingly transported from the manufacturers premises to the users premises without being brought to the registered persons premises. In such a situation manufacturer will issue an invoices under rule 52A. This invoice under Rule 52A will contain, in addition to the prescribed details including the consignees name and address, mentioned therein, the registered persons name and address, on account of whose instructions the godos have been dispatched. The consignee in this case will be the end use. In such a situation the registered persons invoice is not required for availment of Modvat credit. The duplicate copy of the manufacturers invoice under Rule 52A will serve as cover for transport and for availment of Modavat by the end user.
As per the above clarification, it is very clear that if in the invoices end users name is appearing as consignee irrespective of fact that sale purchase transaction is not between the supplier of inputs and the end user, the credit is admissible at the recipients end. On this very issue, this Tribunal in the case of Transformers & Rectifiers (India) Ltd(supra) and Kunststoff Polymers Ltd (supra) has held that credit on invoices issued by first stage or second stage dealer, wherein recipients name is appearing as consignee is admissible for Cenvat credit. The issue being settled as per the Board Circular as well as the ratio of the above referred judgments, impugned order is not sustainable, hence the same is set aside. Appeal is allowed.
(Dictated in Court ) Ramesh Nair Member (Judicial) sk 5 E/1497/12