Availment of Cenvat Credit eligible as Personal Details of Consignee and Manufacturer were mentioned in Invoices: CESTAT Allows Glaxco SmithKline’s appeal [Read Order]

The Customs, Excise and Service Tax AppellateTribunal (CESTAT), Chennai Bench, held that the availment of Cenvat Credit is eligible if the personal details of the consignee, Glaxco SmithKline Consumer Healthcare Ltd., and the manufacturer were mentioned in the invoices submitted.

The facts state that the appellant - Glaxco SmithKline Consumer Healthcare Ltd. (Glaxco) has entered into an agreement with Avlon Cosmetics Private Ltd (Avlon) the terms of which are that Avlon would receive Horlicks and Boost to pack into pouches of 18 gms. and 15 gms. The Revenue department found that Avlon had exclusively cleared / sold back the finished goods to Glaxco under payment of duty on abated MRP value.

It was also noted that Glaxco was to provide Avlon with capital assets and install the same in Avlon’s premises for use in the manufacture of end-products. Avlon had availed cenvat credit of duty paid on such capital goods though documents like invoices revealed that they were raised in favour of Glaxco while the consignment was delivered at the premises of Avlon.

The Revenue was then under the impression that the availment of credit was wrongful and in violation of the Cenvat Credit Rules (CCR), 2004. The Commissioner of Customs, Central Excise and Service Tax (Audit) confirmed the proposals made in the show cause notice.

When approached, the main point of determination before the tribunal was whether there was a violation to Rule 9 of CCR as had been previously held. The title of Rule 9 is “Documents and accounts”.

The tribunal found that Avlon's name and address have been mentioned in the invoices and Avlon has been mentioned as ‘consignee’ in all these excise invoices. CESTAT observed that Glaxco had not availed any cenvat credit in respect of the goods in question.

The two member bench of Vasa Seshagiri Rao (Technical Member) and P. Dinesha (Judicial Member) placed reliance on the Allahabad High Court’s position in Uni Cast Pvt. Ltd. v. CCE Meerut (2016) and was of the view that the allegation of the Revenue is not supported by any statutory provision and hence the demand cannot be sustained. Ultimately, the appeals were allowed and the penalties were set aside.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates