Whether notarized Billof Entry - eligible document under rule 7 (1) of CCR for taking cenvat credit

PJ/Case Laws/2011-12/1222

Case: Ruby Mills Ltd. V/s Commissioner Of C. Ex., Mumbai

Citation: 2009 (15) S.T.R. 616 (Tri.-Mumbai)

Issue:- Notarized certified copy of bill of entry issued by courier agents – falls under category of bill of entry - Cenvat Credit available

Brief Facts: - Respondent is a composite mill manufacturing yarn, grey fabric and processed fabric. They were availing benefit of Modvat/Cenvat credit on the inputs and capital goods at their factory as per Cenvat Credit Rules, 2002. All the inputs were used in the manufacture of excisable products which are cleared on payment of appropriate duty. The appellants were receiving imported inputs/capital goods that were imported through courier agencies under cover of notarized bill of entries. The appellant have received various inputs/capital goods during the periods 2000-01 to 2003-04 under cover of notarized bill of entries through courier agencies. There is no dispute that inputs/capital goods were covered under the scope of Rule 2 of Central Excise Rules, 2002 and that they were duty paid in nature which are used in or in relation to the manufacture of excisable goods and cleared on payment of duty. A record is also maintained as per Rule 7 of Cenvat Credit Rules, 2002. The appellant’s unit was subject to regular audits by the officers of Central Excise department. During special excise audit during the period August, 2002 to September 2002, an audit objection was raised regarding availment of Cenvat credit on notarized copy of courier bill of entry. They also furnished a specimen copy of courier bill of entry.

Show cause notice was issued proposing to deny Cenvat credit on notarized courier bill of entries and for imposing penalty. The appellant submitted detailed clarification on the merits of availment of Cenvat credit and also on the time barred nature of the demand.

The Assistant Commissioner confirmed the demand under Rule 12 of Cenvat Credit Rules, 2002 read with Sec. 11A of Central Excise Act, 1944 and also imposed equal amount of penalty under Sec. 11AC read with Rule 13 of Central Excise Rules, 2002. Aggrieved by the order of the Assistant Commissioner, appellants preferred appeal before the Commissioner (Appeals) who has rejected their appeal. Hence appellant moved to Tribunal.

Appellant’s Contention: - The contention of the appellants is that Rule 7(1) of Cenvat Credit Rules, 2002 visualizes that the manufacturer can avail Cenvat credit on the basis of any of the documents referred at clauses (a) to (f). Clause (c) to Rule 7(1) contemplates ‘a Bill of Entry’ as a duty paying document. In other words if the inputs are covered under a bill of entry then the manufacturer is eligible for availment of Cenvat credit. The said rules do not enumerate any specific copy of bill of entry. Accordingly notarized certified copy of bill of entry for imports through courier agent is duly covered for availment of Cenvat credit.

The appellants have relied upon a number of decisions of the Tribunal which are noted in the memorandum of appeal. Further, they rely upon decision of the Tribunal in the case of Vardhaman Acrylics Ltd. v. Commissioner of Central Excise & Customs, Surat-II - 2006 (4) S.T.R. 489 (Tribunal) = 2006 (204) E.L.T. 321 (Tri.-Mumbai).

Reasoning of Judgement: - The Tribunal held that the Commissioner’s view that anotarized certified copy of bill of entry issued by courier agents does not fall within thecategory of clauses (a) to (m) was not tenable. The decision relied upon by the appellant squarely covers the issue on hand in favour of the assessee. A notarized certified copy of bill of entry can be treated in the category of bill ofentry on the analogy laid down in the aforesaid decision. Therefore, the Tribunal was of the view thatthis is a fit case where Cenvat credit cannot be denied in as much as receipts of the inputsin the factory premises and their user in or in relation to the manufacture of final productis not in dispute.

Decision: - Appeal allowed.

Comments

PJ/Case Laws/2011-12/1222

Post a Comment

Query