SHARP PUMPS (P) LTD. Vs. CCE

JUDGEMENT

(1.) THE appellant is engaged in the manufacture of water pumps. During 2003 -2004, they took CENVAT credit of Rs. 2,87,231/ - on their own final products (deemed inputs) returned by the buyers under Rule 16(1) of the Central Excise Rules, 2002?) One of the issues in this case is whether this credit is deniable to the assessee on the ground that it was taken on the basis of invalid documents. The credit was taken on the basis of triplicate copies of invoice issued by the assessee themselves at the time of original clearance of the goods. In the final order passed by me earlier today in Appeal No. E/283/05 (BAPL Industries Ltd v. CCE, Coimbatore), I have already held such documents to be Cenvatable. The relevant part of the said final order is reproduced below :

(2.) AFTER giving careful consideration to the submissions, I am inclined to accept the arguments of ld. Counsel. Rule 16(1) of the Central Excise Rules. 2002 laid down that where any final product cleared by a manufacturer on payment of duty was returned by the buyer for being remade, refined, reconditioned etc., the former would be entitled to take CENVAT credit of such duty as if such goods were received as 'inputs' under the CENVAT Credit Rules, 2002. Admittedly, in the present case, the final products cleared by the appellant on payment of duty under the aforesaid invoices dated 04.03.2003 and 10.03.2003 were returned by the buyer and such duty was taken as CENVAT credit by appellant treating the goods as inputs. The only objection of the Department is that such credit was taken on the basis of allegedly inadmissible documents. These documents are triplicate invoices dated 04.03.2003 and 10.03.2003 originally issued by the appellant themselves. I find that, by virtue of deeming provisions of Rule 16(1), where the final product returned by the buyer was deemed to be input by the assessee, the duty paying document covering the goods should also be deemed to have been issued by input -manufacturer. In other words, when the appellant took CENVAT credit of the duty -paid by themselves on the goods in question, they were doing so on the basis of invoices of input -manufacturer. Rule 11(3) of the Central Excise Rules, 2002 laid down the manner in which the invoices should be prepared. Accordingly, an invoice should be prepared in triplicate viz., 'ORIGINAL FOR BUYER', 'DUPLICATE FOR TRANSPORTER' AND 'TRIPLICATE FOR ASSESSEE'. This provision did not specify as to which of these documents could be used for Cenvat purpose. In this context, CBEC's instructions would govern the field. After referring to the above 3 copies of an invoice, instruction No. (4.2) reads as under: The above requirement is mainly for Central Excise purposes. However, the assessee may make extra copies of invoice for his other requirements. But such copies shall be prominently marked 'NOT FOR CENVAT PURPOSES. According to the above instruction, any copy of invoice other than extra copy could be used for Cenvat purpose. Instructions of the Board issued under Section 37B of the Central Excise Act have the force of law. Hence it cannot be said that during the period of dispute there was no provision of law enabling the appellant to use triplicate copy of invoice for Cenvat purpose.

(3.) LD . SDR has relied on a Trade Notice which apparently revised the procedure for receipt, by the manufacturer, of a final product returned by his buyer for the purpose of remaking, reconditioning etc., under Rule 16(1) of the Central Excise Rules. 2002. This Trade Notice inter alia provides as under: The assessee shall not be entitled to CENVAT credit, since the goods received have not been accompanied by valid duty paying document prescribed under the CENVAT Credit Rules. 2002. But I have already held in the light of Rule 11(3) of the Central Excise Rules, 2002 read with CBEC's Supplementary Instruction No.4 and Rule 7 of the Cenvat Credit Rules, 2002, that a triplicate copy of invoice was valid for CENVAT credit purpose during the period of dispute. Even otherwise the above provision of Trade Notice revising the procedure in Nov.'03 cannot affect the cenvatability of the "deemed inputs" received in the appellants' factory in Sept.'03. Accordingly, it is held that the CENVAT credit of Rs. 2,87,231/ - is admissible to the appellants.