In a recent decision, division bench of the Allahabad High Court held that the Bill of Entry in the name of the assessee without the endorsement of proper office of Customs is a valid document for availing CENVAT credit under the provisions of the CENVAT Credit Rules, 2004.
The assessee M/S International Tobacco Co. Ltd, a distinct manufacturer, imported capital goods, which were in the nature of machine and which had been brought in the name of M/s Godfrey Phillips India Ltd and took CENVAT Credit on the same. The said machines were then diverted to the assessee. The department has come in appeal taking a ground that the said diversion was made in violation of Rule 9 of the CENVAT Credit Rules, 2004.
The Tribunal held that there is no violation of Rule 9 of the CENVAT Credit Rules since there was no dispute about the duty paid nature of the capital goods and receipt of same by the assessee and used also for its own internal purposes.
The question before the Court was that whether bills of entry in the name of M/s Godfrey Phillips India Ltd. and not bearing the endorsement of proper office of Customs are valid documents under Rule 9 of the CENVAT Credit Rules, 2004 so as to entitle the respondent (a distinct manufacturer) to avail CENVAT Credit?
As per Rule 9(2) of the said Rules, “9(2)-No CENVAT credit under sub-rule (1) shall be taken unless all the particulars as prescribed under the Central Excise Rules, 2002 or the Service Tax Rules, 1994, as the case may be, are contained in the said document”
“Provided that if the said document does not contain all the particulars but contains the details of duty or service tax payable, description of the goods or taxable service [assessable value, Central Excise or Service tax registration number of the person issuing the invoice, as the case may be,] name and address of the factory or warehouse or premises of first or second stage dealers or [provider of output service], and the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, is satisfied that the goods or services covered by the said document have been received and accounted for in the books of the account of the receiver, he may allow the CENVAT credit.”
Accordingly, the division bench comprising of Justice Bharati Sapru and Justice Vinod Kumar Misra upheld the order of the Tribunal.
Read the full text of the Judgment below.