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Cenvat/Modvat — Inputs sent directly to processor — to save transport cost — Held, assessee is entitled to take credit of duty paid since there was no dispute about their receipt in their factory and use in manufacture of finished goods — Demand — Limitation — Inputs received in factory sent for further processing to save cost — Held, there was no intention to evade payment of duty by taking wrong credit.
Facts: The respondent purchased the brake assemblies and took the credit on the basis of invoice issued to them. The goods were not sent to the factory of the respondent, but were dispatched to a job-worker processor at Pune from whom the respondent was getting finished goods produced which in turn were used for further manufacturing of excisable goods in the factory of the respondent. The Department was of the view that the respondent was not eligible for CENVAT credit as the brake assemblies had not been physically received in their factory. The Department filed an appeal against the above order on the ground that since brake assemblies purchased by the respondents from the supplier had not been received but dispatched to the processor for being fitted with rear/front axles being supplied to the respondent, hence the respondents were not eligible for CENVAT credit.
Held:
If the respondent had first transported the brake assemblies to their factory and then sent the same to the processor for being fitted with rear/ front axles being supplied by them, they would be entitled to CENVAT credit for brake assemblies on the basis of invoices issued by the supplier. To avoid unnecessary transportation, the brake assemblies were sent to the processor. Hence, the CENVAT credit cannot be denied as there was no intention to evade payment of duty by taking wrong CENVAT credit.
