M/S. New Allenberry Works vs Commissioner Of Central Excise

[Arising out of Order-In-Appeal No. 208/CE/Appl/DLH-IV/2011 dated 26/12/2011 and 197-198/CE/Appl/DLH-IV/2011 dated 26.12.2011 both passed by Commissioner of Central Excise (Appeals) Delhi IV, Faridabad.]

For approval and signature:

Honble Mr Ashok Jindal, Member (Judicial)

1 Whether Press Reporters may be allowed to see 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 of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

M/s. New Allenberry Works Appellants

Vs.

Commissioner of Central Excise Respondent

Delhi IV, Faridabad

Appearance:

Shri J P Kaushik, Advocate for the Appellants

Shri G R Singh, AR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 16.06.2015

FINAL ORDER NO. A/51962-51963/2015-(SM)

Per Ashok Jindal :

The appellant is in appeal against the impugned orders. Appeal No. E/673/2012 is against the order of denial of cenvat credit to the appellant on the strength of six invoices issued by M/s. Regal Metals & Ferro Alloys and consequently demanding duty along with interest and imposing penalty.

2. In appeal No. 674/2012, the appeal is filed by the appellant for denial of refund on duty paid during the course of investigation, wherein cenvat credit is sought to be denied to the appellant and same has been confirmed as per Appeal No. E/673/2012. As appeal No. E/674/2012 is the consequence of appeal No. E/673/2012. Therefore, appeal No. E/673/2012 is taken up for disposal first and the result of the same shall be followed in Appeal No. E/674/2012.

3. The facts of the case are that the appellant is manufacturer of gear and shafts. They procures steel rods from M/s. Regal Metals & Ferro Alloys (second stage dealer) on cenvatable invoices. The appellants availed cenvat credit of duty paid by the second stage dealer on the goods in question. On investigation being conducted in the premises of M/s. Regal Metals & Ferro Alloys, it was found that the manufacturer-supplier and first stage dealer has shown the description such as SS flat v straight in coil form or wire rods in coil form. A case has been made against the appellant on the basis of invoices to allege that the description of the goods is not same in all the manufactures invoices with the second stage dealer. Therefore, appellant is not entitled to take cenvat credit on these goods. Consequently, the show cause notice was issued and cenvat credit was denied to the appellant along with interest. Consequently, duty was demanded along with interest and equivalent amount of penalty was imposed. During the course of investigation, the appellant reversed the cenvat credit. Later on, on presumption that they have taken cenvat credit correctly, they have filed the refund claim, which was rejected by both the lower authorities. That resulted in Appeal No. E/674/2012.

4. The learned Counsel of the appellant submits that the appellant has taken cenvat credit on the strength of invoices issued by second stage dealer wherein description of the goods have been shown correctly which goods they have received. The appellant has paid the duty to the second stage dealer on the impugned goods and availed cenvat credit. He also submits that the understanding of the second stage dealer is that the SS flat, wire rods in coil form are only steel rods. Therefore, while issuing invoices to the appellant, they have given the description as steel rods instead of SS flats/ wire rods. It is also submitted that rate of duty on both the items is same. Moreover, except one invoice, i.e. 241 dated 26.11.05, classification in all the other invoices is same as per manufacturer supplier invoices. Therefore, cenvat credit cannot be denied to the appellant. It is not in dispute that appellant has not received the goods and not paid the duty. Therefore, appellant has correctly taken the cenvat credit.

5. On the other hand, learned AR opposed the contention of the learned Counsel and drew my attention to the show cause notice to show that as per manufacturer  supplier invoices, description of goods is mis-match. Therefore, the goods covered under the cover of M/s. Regal Metals & Ferro Alloys are not same goods on which duty has been suffered by the manufacturer supplier. Therefore, appellant is not entitled to take the cenvat credit.

6. Heard the parties. Considered the submissions and perused the records.

7. On being asked, the manufacturer supplier invoice was not provided for verification as same is not relied upon documents. When the manufacturer invoices has not been relied to allege against the appellant that they have taken inadmissible cenvat credit on the strength of second stage dealer invoices, the foundation of show cause notice is totally weak. As manufacturer invoices has not been relied, therefore, the invoices against which the appellant has taken cenvat credit is the correct invoice and description shown in the said invoice is correct and it is the invoice on which has been suffered duty. Therefore, the appellant is entitled to take cenvat credit on the strength of invoices issued by second stage dealer. Moreover, it is not the case of the Revenue that appellant has not received the goods against these invoices as per the show cause notice. Both the lower authorities have gone beyond the allegation in the show cause notice holding that appellant has received the invoices not the goods. Therefore, finding of both the lower authorities is beyond the scope of show cause notice as the appellant has received the goods in their factory against duty paid invoices, therefore, they have correctly taken the cenvat credit. In these circumstances, I hold that appellant is not required to reverse the cenvat credit. Consequently, appeal No. E/673/2012 stand allowed by setting aside the impugned order. Consequently, Appeal No. E/674/21012 also stands allowed as consequential relief of Appeal No. E/673/2012.

8. With these terms, both the appeals are allowed.

(Dictated and pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

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