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Mammon Concast Pvt. Ltd. vs. Alwar - (Customs, Excise and Service Tax Appellate Tribunal) (17 Jun 2021)

An importer is entitled to avail cenvat credit on inputs, if the importer is registered in terms of the provisions of Central Excise Rules



The issue in present appeal is whether the Appellant have rightly taken credit of service tax on port charges etc. in the facts that they had purchased the goods from high sea seller and some of the invoices for port services etc. were in the name of high sea seller, but in fact have been paid by the appellant who have filed Bill of Entry for home consumption, and such Bill of Entry also mentioned the name of the original importer (who sold on high sea sale basis). The appellant is a manufacturer of M. S. Billets. The Appellant was also availing the cenvat credit facility of input and input services, for the manufacture of their final product.

Admittedly, the melting scrap purchased by the Appellant on high sea sale, is their input for manufacture of M.S. billets. Rule 9(1) of Cenvat Credit Rules, 2004 provides that, cenvat credit shall be taken by the manufacturer on the basis of invoice issued by a manufacturer for clearance of inputs from his factory or depot or from the premises of the consignment agent of the said manufacturer or from any other premises from where the goods are sold by or on behalf of the said manufacturer. Similarly, an importer is entitled to avail cenvat credit on inputs, if the importer is registered in terms of the provisions of Central Excise Rules, 2002 (admittedly Appellant is registered with the Central Excise Department as well as the Service Tax Department). Further, Rule 9(2) of Cenvat Credit Rules provides that, 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 documents.

Further, Rule 4A(1) of Service Tax Rules provides that, every provider of taxable service on completion of such service or receipt of payment towards the same, shall issue an invoice or bill or as the case may be, a challan in respect of such taxable service provided or agreed to be provided and such document shall be serially numbered.

There is no dispute as to the aforementioned requirement save and except the invoice not being in the name of the Appellant (but in the name of the original importer - high sea seller). No specific documents have been mentioned considering the transaction of subsequent sale on high sea sale basis, in the Rules. Thus, the scheme of the Act read with the Rules has to be read harmoniously. If for something missing in the rules, the cenvat credit is available under the scheme of the Act, read with Rule 3 read with Rule 2(l) and (k) of the Cenvat Credit Rules, service credit cannot be denied for some gap left in the statute. Such interpretation will defeat the scheme of cenvat credit, leading to anomalous situation. Accordingly, in the facts and circumstances, Appellant has rightly taken cenvat credit under dispute. The impugned order stands modified. The penalty imposed is also set aside. Appeal allowed.


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