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PJ/Case Laws/2011-12/1576

Admissibility of Credit on goods endorsed by Head office to Factory

Case: M/S AAR KAY FORGE PVT LTD V/S CCE, DELHI-IV
 
Citation: 2011-TIOL-1485-CESTAT-DEL
 
Issue:- Whether an assessee is eligible for credit paid on goods which were endorsed by their head office to their factory.
 
BRIEF FACTS:- It was alleged against the appellants that they were engaged in the activities of providing the services of erection, commissioning and installation of air conditioning and related works to various customers, such as military, railways and airports etc, were registered with the central excise at plot no. 25, sector 4, Faridabad. In February 2006, the appellants got registered in their own name at plot no. 49, sector 6, Faridabad showing their old premises as their head office. In the month of June 2006 to July 2006, the appellant procured inputs against duty paid invoices on which the address of their head office was mentioned and the said goods have been received in their factory at new address of their factory at new address of their factory through endorsement of head office to the factory address. It was disallowed under Rule 9 of cenvat credit rules, 2004. Therefore show cause notices were issued.
 
APPELLANTS CONTENTION:-The appellant contended that denial of credit on the basis of the invoices issued at the address of the head office which were endorsed to the factory premises is not a valid action. Being a technical error the credit should not be denied.
 
RESPONDENTS CONTENTION: -The respondent contended that as per new rule no endorsement is allowed. It was also contended that endorsed invoices is not proper document for the availment of the cenvat credit as rule 9 of cenvat credit rules, 2004.
 
REASONING OF JUDGEMENT: -It was observed that the endorsement of inputs by the head office to the factory was not an endorsement to the party. It is admitted that the appellant have received these goods against duty paid invoices in their factory and the same have been used in the manufacture of the final products on which the duty has been discharged. The cases which were referred by the respondent were also not relevant for the present case.
 
DECISION: - The impugned order was set aside and the appeal was allowed.

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