CA Bimal Jain

CA Bimal JainAplab Ltd. Vs. Commissioner of Central Excise, Mumbai-III [2015 (62) taxmann.com 193 (Mumbai – CESTAT)]

In the instant case, Aplab Ltd. (“the Appellant”), a manufacturer, availed Cenvat credit on the strength of invoices wherein the Appellant’s name was appearing as consignee and in the column of the buyer, name of the dealer was mentioned. The Department disallowed the Cenvat credit and alleged that since the Appellant is not the buyer as per the invoices and they are not making payment for the said invoices to manufacturer-supplier, therefore documents are invalid documents and credit is not admissible on the basis of such documents.

The Hon’ble CESTAT, Mumbai held that invoices, on the basis of which Cenvat credit was availed was issued by manufacturer-supplier and the Appellant’s name is clearly appearing as consignee, therefore the invoices in question are squarely covered by clause (a) of sub rule 1 of Rule 9 of the Credit Rules. The Hon’ble Tribunal further noted that there are plethora of judgments wherein it was held that for taking Cenvat Credit on inputs, it is not mandatory that payment towards purchase of inputs has to be made. There are number of transactions in the trade such as procurement of inputs from group company, sister concern on payment of duty, procurement of inputs for job work, etc., where no payment is made towards supply of inputs. Hence, it was held that Cenvat credit is admissible and cannot be denied as long as inputs are duty paid, received in the factory and used in the manufacture of final products.

(Author can be reached at Email: bimaljain@hotmail.com)

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0 responses to “Cenvat credit can be availed by manufacturer on strength of invoices issued by supplier of inputs showing manufacturer's name as consignee and name of dealer as buyer”

  1. CMA ASIM SAHA says:

    I think this issue has been cleared in 2014 budget speech

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