1. The Department has assailed the Order-in- Appeal No. 15/JPR/2017-18 dated 7th February, 2018, vide the present appeal. The facts in brief relevant for the purpose are that the respondent assessee M/s. Genus Power Infrastructures Ltd. are engaged in manufacture of electric energy meters and were availing the Cenvat Credit upon the duty paid thereof. During the course of audit, Department observed that the respondent, assessee has availed the Cenvat Credit of Rs. 88,51,546/- During the period from April 2012 to August, 2014 on the strength of ineligible documents i.e. endorsed invoices/Bill of Entries which amounts to contravention of rule 9 (1) of Cenvat Credit Rules, 2004. Resultantly, a show cause notice No. 673-75 dated 12/16 February, 2015 proposing the recovery of the said amount of Cenvat Credit alleging the same to have been wrongly availed, alongwith the interest at appropriate rate and the proportionate penalty. The said proposal was confirmed vide Order-in-Original No. 114/2016-17 dated 15.02.2017. The appeal thereof has been allowed vide order under challenge. Pursuant thereto Review Order dated 20 April, 2018 was passed requiring the Department to prefer an appeal before this Tribunal. Consequently, the Department is in appeal before this Tribunal.
2. It is submitted on behalf of the appellant/Department that Rule 9 of Cenvat Credit Rules, 2004 do not specify for endorsed invoices/Bill of Entries to be the relevant document for the purpose of claiming the cenvat credit. There is no denial that the assessee/respondent has availed the Cenvat Credit on the endorsed invoices. Hence, it is a case of definite violation of Rule 9 because of which the Cenvat Credit could not have been allowed to be availed, as was earlier held by original adjudicating authority. However, the Commissioner (Appeals) has given a contrary finding. The order is, accordingly, liable to be set aside.
3. While rebutting these arguments, ld. Counsel for the assessee-respondent has submitted that the respondent has taken Cenvat Credit on such inputs which have been received by them through their another unit located at Haridwar, Uttaranchal However, on the strength of the invoices/Bill of Entry, which were endorsed by Haridwar Unit in its favour.
4. It is submitted that in terms of Rule 9 (1) (a) and 9 (1) (c) of Cenvat Credit Rules an invoice and Bill of Entry are valid documents based on which a manufacturer of final product can avail credit. An invoice or Bill of Entry does not cease to be an invoice or Bill of Entry after endorsement, but remain as such. Learned Counsel has mentioned that the endorsed invoices had already been held to be a valid document under Rule 9/1 of Cenvat Credit Rules. Following decisions have been relied upon:-
1. CCE, Chandigarh vs. Stelko Strips Ltd., reported in 2010 (255) ELT 397 (P & H)
2. Uni Cast Pvt. Lot. Vs. CCE, Meerut reported in : 2016 (331) ELT 369 (All.)
3. Sona Koya Steering Systems Ltd. v. CCE reported in : 2013 (296) ELT 481 (Tri.-Del.)
4. International Tobacco Co. Ltd. v. CCE, Ghaziabad reported in 2018 (8) TMI 1170, CESTAT-Allahabad.
5. Alleging the grounds taken in the show cause notice to be based on assumptions and presumptions and that the ground taken in the appeal is the one, which is not alleged in the show cause notice issued to the appellant, that the order of Commissioner (Appeals) is prayed to be upheld and appeal is prayed to be dismissed.
6. After hearing the parties, we observe that the Cenvat Credit to the assessee-respondent has been denied for want of the eligible documents for the purpose. We observe that there is no denial about the receipt of the inputs/raw-material by the respondent-assessee in their factory from their another unit at Haridwar for those inputs/raw-material to be used in the manufacture of dutiable final product by the assessee-respondent. There is also no denial to the facts that liability towards Excise Duty on such final product has already been discharged by the appellant. Apparently and admittedly, under Rule 9 (1) an invoice and Bill of Entry are valid documents based on which a manufacturer of final product can avail credit. We observe from the rule that there is no stipulation about the said invoice or the Bill of Entry to not to be the endorsed. We further observe that the issue is no more res integra. The Hon'ble Supreme Court way back in the year 2008 when the previous rules of Modvat Cenvat Credit were prevalent for the purpose, has already held in the case of Union of India vs. Marmagoa Steel Ltd. reported as 2008 (229) ELT 481 (SC) as follows:-
"9. At this stage we may quote the provisions of Rule 52A and Rule 57G:
"RULE 52A. Goods to be delivered on an invoice. - (1) No excisable goods shall be delivered from a factory or a warehouse except under an invoice signed by the owner of the factory, or his authorised agent.
"RULE 57G. Procedure to be observed by the manufacturer. - (1) Every manufacturer intending to take credit of the duty paid in inputs under rule 57A, shall file a declaration with the Assistant Collector of Central Excise having jurisdiction over his factory, indicating the description of the final products manufactured in his factory and the inputs intended to be used in each of the said final products and such other information as the said Assistant Collector may require, and obtain a dated acknowledgment of the said declaration.
(2) A manufacturer who has filed a declaration under sub-rule (1) may, after obtaining the acknowledgment aforesaid, take credit of the duty paid on the inputs received by him:
Provided that no credit shall be taken unless the inputs are received in the factory the cover of an invoice issued under Rule 52A, an AR-1, or Bill of Entry or any other document as may be prescribed by the Central Government by notification in the Official Gazette in this behalf evidencing the payment of duty on such inputs.
10. On reading Rule 52A the position which emerges broadly is that the said Rule refers to eligibility for claiming MODVAT Credit, whereas Rule 57G refers to procedure to be observed by the manufacturer for taking credit for the duty paid on the inputs received by him. A bare reading of Rule 52A shows that no excisable goods shall be delivered from a factory or a warehouse except under an invoice signed by the owner of the factory or his authorised agent. Rule 52A, therefore, applies to a situation where goods are cleared from a factory or a warehouse to the place of assessee. For such a situation the proviso in Rule 57G stipulates that no credit shall be taken unless the inputs are received in the factory under the cover of an invoice issued under Rule 52A. However, that situation does not arise in this case for the simple reasons that the importer M/s. Essar Gujarat Limited had loaned the goods to the assessee (which transaction is not doubted in the show cause notice). Further the goods were transferred directly by the importer to the Unit of the assessee from the Port. Therefore, the goods never went to the manufacturing Unit of M/s. Essar Gujarat Limited. For such a situation the proviso to sub-rule (2) of Rule 57G states that the relevant document indicating payment of duty would be Bill of Entry."
7. Subsequently, there have been the decisions as already quoted by the ld. Counsel for the assessee. Hon'ble High Court, Allahabad in the case of Unicast Pvt. Ltd. Vs. CCE, Meerut reported in : 2016 (331) E.L.T. 369 (Allahabad) has quoted the findings of Hon'ble High Court of Madras in the case of CCE, Salem vs. M/s. Chemplast Sanmar Ltd. [2009 (239) ELT 398 (Mad.) that Modvat Credit cannot be denied to an assessee on a technical ground that the procedure prescribed for availment of credit was not followed at the material time.
8. Hon'ble Apex Court in Ichalkaranji Machine Centre Pvt. Ltd. v. Collector of Central Excise, Pune [2004 (174) E.L.T. 417 (S.C.)], the Supreme Court explained the object and scope of Modvat credit holding:-
"9. Modvat is basically a duty-collecting procedure, which aims at allowing relief to a manufacturer on the duty element borne by him in respect of the inputs used by him. It was introduced w.e.f. 1-3-1986. The said scheme was regulated under Rules 57A to 57J of Central Excise Rules, 1944. Rule 57A entitled a manufacturer to take instant credit of the central excise duty paid on the inputs used by him in the manufacture of the finished product, provided that the input and the finished product were excisable commodities and fell under any of the specified chapters in the tariff schedule. Under Rule 57G, every manufacturer was required to file a declaration before the jurisdictional Assistant Collector, declaring his intention to take Modvat credit after paying duty on the inputs. The object behind Rule 57A read with Rule 57G and Rule 57-I was utilization of credit allowed towards payment of duty on any of the final products in relation to manufacture of which such inputs were intended to be used in accordance with the declaration under Rule 57G. Rule 57-I referred to consequences of taking credit wrongly.
10. The object of the Modvat scheme was to reduce cost of final product by taking credit for the duty paid on the inputs."
9. It has also been clarified by the Hon'ble Supreme Court in the case of Madras Cements Ltd. Vs. Commissioner of Central Excise reported in : 2010 254 E.L.T. 3 (S.C.) that to avail the Modvat/Cenvat Credit an assessee has to satisfy the assessing authorities that the capital goods on which the credit has been availed have been utilized during the process of manufacture of the finished products. As already observed, there is no denial of the Department for the same. Thus, in the given circumstances, we are of the opinion that when admittedly the inputs/capital goods/raw-material has been transferred from one unit to another by making endorsement on the invoices and these transferred goods are used by recipient unit in manufacture of final product then such invoices can be taken as a valid document by said recipient unit for taking the Cenvat Credit irrespective of the fact that the invoice was issued in the name of transferring unit but has been endorsed in the name of recipient unit who is appellant in the present case. This view stands corroborated from the decision of this Tribunal in the case of CCE vs. Coimbatore Murugan Mills reported in : 2003 (160) E.L.T. 825.
10. Above all, the allegation of the show cause notice are pointing merely a procedural lapse. Hon'ble Supreme Court in case of Sambhaji vs. Gangabhai reported in: 2009 (240) E.L.T. 161 (S.C.) has held that all rules of procedures are handmaids of justice. Language employed by draftsman of procedural law may be liberal or stringent but object of prescribing procedure is to advance the cause of justice. It was held that no party should ordinarily be denied opportunity of participating in process of justice dispensation in an adversarial system. Procedural law is not to be a tyrant but a servant, not an obstruction but an aid to justice. A procedural prescription is the handmaid and not the mistress, a lubricant, not a resistant in the administration of justice. The endorsed invoice otherwise qualify the intent of the legislature in terms of proviso to Rule 9 (2) of CCR. In view of entire above discussion, we do not find any infirmity in the order of Commissioner (Appeals), wherein he has quoted as follows:-
"9. I find that it is not a case of the revenue that the inputs on which CENVAT credit has been availed were not received in the factory premises or were not used
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in the manufacture of the final product on which appropriate duty was paid. I also find that in case of CCE, Noida vs. Fles Industries Ltd. - 2004 (178) ELT 1029 (Tri.-Del.), Hon'ble Tribunal held that goods transferred from one factory to other factory of the same company by making endorsement on the invoices is a valid documents for taking CENVAT Credit under Rule 9 of the CC Rules, 2004, and in CCE vs. Coimbatore Murugan Mills : 2003 (160) ELT 825 (Tri. - Chennai), it was held that the inputs transferred to sister unit of the same parent unit on the basis of endorsed invoices issued by the sister unit proper and CENVAT Credit is admissible. In Akzo Nobel Coatings (I) Ltd. vs. CC Ex., Bangalore reported in : 2013 (290) ELT 108 (Tri.-Bang.), it was held that CENVAT Credit cannot be denied on endorsed Bill of Entry under Rule 9 of CENVAT Credit Rules, 2004. I further find that in CCCE vs. DNH Spinners : 2009 (16) STR (Tri.-Admd.), Twenty First Century Printers Ltd. vs. CCE - 2009 (234) ELT 277, it was held that substantive benefit cannot be denied on procedural grounds of endorsed documents, when there is no dispute of material having been received and used for manufacture of final product which were cleared on payment of duty." 11. The order accordingly is upheld and appeal stands dismissed.