Echjay Forgings Pvt. Ltd vs Commissioner Of Central Excise, ...

(Arising out of Order-in-Appeal No. BC/368/M-III/2011-12 dated 13.3.2012 passed by Commissioner of Central Excise (Appeals), Mumbai-III)

For approval and signature:

Honble Mr. P.K. Jain, Member (Technical) and Honble Mr. Ramesh Nair, Member (Judicial)

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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?

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Echjay Forgings Pvt. Ltd. Appellant Vs. Commissioner of Central Excise, Mumbai-III Respondent

Appearance: Shri Prasad Paranjape, Advocate, for appellant Shri Rakesh Goyal, Additional Commissioner (AR), for respondent

CORAM: Honble Mr. P.K. Jain, Member (Technical) Honble Mr. Ramesh Nair, Member (Judicial)

Date of Hearing: 3.3.2015 Date of Decision: 3.3.2015

ORDER NO

Per: P.K. Jain

Brief facts of the case are that the appellant has placed orders to certain suppliers and the suppliers in turn placed order to the first stage or second stage dealer. The first stage or the second stage dealer issued invoices. The invoices clearly indicate that the goods are to be consigned to the appellant. However, the amount is to be recovered from the supplier. The appellants in turn are paying for the goods to the supplier.

2. Learned counsel for the appellant submitted that the issue is already settled by the Honble High Court of Gujarat in the case of CCE, Ahmedabad-II vs. Transformers & Rectifiers (I) Ltd. reported in 2012 (281) ELT 670 (Guj.) and in view of the said decision of the Honble High Court of Gujarat, the appeal may be allowed.

3. Learned AR reiterated the points made in the impugned order and submitted that the procedural aspects are very important. In the present case, the goods have not been directly purchased by the appellant from the first stage dealer or the second stage dealer and, therefore, they are not entitled to take the credit.

4. We have gone through the judgment of the Honble High Court of Gujarat where exactly the same issue was discussed and the Honble High Court has dismissed the appeal of the Revenue against the decision of the Tribunal. We also find that no appeal has been filed against the said order of the Honble High Court of Gujarat and it has been confirmed by the Board vide letter F.No. 276/55/2012-CX.8A dated 15.5.2012. In the said letter, following has been observed by the Board:-

The matter has been examined by the Board. The Board is of the view that in the circumstances of the case, the - receipt of input, admissibility of Cenvat Credit and there subsequent usage as inputs is not in doubt and goods have been legitimately procured in the course of Transit Sales, an accepted business practice, and therefore Cenvat Credit cannot be denied in such cases. Rules 9(1) & 9(2) of the Cenvat Credit Rules do not invalidate the invoice issued in the course of Transit Sale. The rationale of the Board Circular No,218/62//1996-CX dated 4.6.1996 applies mutatis mutandis to this case.

5. In view of the above factual matrix, the issue no longer requires consideration by this Bench and the appeal is allowed. (Operative part pronounced in Court)

(Ramesh Nair) Member (Judicial) (P.K. Jain) Member (Technical)

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