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2006 Supreme(P&H) 4378
PUNJAB & HARYANA HIGH COURT
Adarsh Kumar Goel and Rajesh Bindal JJ.
Commissioner Of C. Ex., Delhi-iii, Gurgaon
Versus
Myron Electricals Private Limited
Central Excise Appeal No. 123 of 2006,
Decided On : NOVEMBER 21, 2006
Verifiability of goods receipt, payment of duty, and use of inputs as the basis for availing credit on inputs.
Headnote:
Modvat Credit - Central Excise Rules - Manufacturer's Credit on Inputs - Summary: The court addressed the issue of whether a manufacturer can avail credit on inputs based on invoices issued by a dealer from premises other than those for which Central Excise registration has been granted. The court held that if the goods were received and payment of duty and use thereof was verifiable, credit could not be denied merely on the ground that the documents did not contain all the particulars.
Fact of the Case:
The assessee claimed Modvat credit during a specific period. The department disputed the claim on the ground that the registered dealer had stopped functioning from the registered premises. The adjudicating authority confirmed the demand and imposed a penalty, which was upheld by the appellate authority. The Tribunal accepted the appeal of the assessee, citing payment of duty, receipt of inputs, and use of inputs in the final product as proved.
Finding of the Court:
The court dismissed the appeal, stating that no substantial question of law arises, and the contention that the invoice should have been issued by the dealer from the premises registered with the department has no merit. The court highlighted the clarification by the Board and the amendment to the Central Excise Rules, emphasizing that credit could not be denied based on incomplete documents if the goods' receipt, payment of duty, and use were verifiable.
Issues: The main issue was whether a manufacturer can avail credit on inputs based on invoices issued by a dealer from premises other than those for which Central Excise registration has been granted.
Ratio Decidendi: The court emphasized that if the goods were received and payment of duty and use thereof was verifiable, credit could not be denied merely on the ground that the documents did not contain all the particulars.
Final Decision: The appeal was dismissed.
1. This appeal has been preferred by the revenue against the order dated 24-8-2005 passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi Principal Bench, New Delhi (for short, #24;the Tribunal#25;) in Appeal No. E/454/04/NB(S), proposing following substantial question of law :-
#28;Whether a manufacturer can avail credit on inputs on the strength of invoices issued by a dealer from the premises other than for which Central Excise registration has been granted under Rule 174 read with Rule 52AA of Central Excise Rules, 1944?#29;
2. The assessee claimed Modvat credit during the period from January 2000 to August 2000. The department issued a show cause notice disputing the claim of the assessee on the ground that the registered dealer had stopped functioning from the registered premises w.e.f. 30-9-1999. The adjudicating authority confirmed this demand and imposed penalty which was upheld by the appellate authority. The Tribunal has accepted the appeal of the assessee holding that payment of duty, receipt of inputs and use of inputs in the final product stood proved and as per clarification from the Board, credit could not be disallowed, once payment of duty and receipt and use of inputs was established.
3. We have heard learned Counsel for the revenue and perused the findings recorded.
4. Only contention raised is that there was a statutory requirement that invoice should have been issued by the dealer from the premises registered with the department.
5. This contention has no merit and over-looks the clarification by the Board itself in the circular relied upon by the Tribunal, namely, Circular No. 441/7/99 dated 23-2-99 as well as Notification No. 7/99-C.E. amending Rule 57G of the Central Excise Rules, 1944 , to the effect that if the goods were received and payment of duty and use thereof was verifiable, credit could not be denied merely on the ground that the documents did not contain all the particulars.
6. In view of the above, we are of the view that no substantial question of law arises.
7. The appeal is dismissed.
