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CX - Crane imported in name of partner but used by partnership firm - payment is not criteria for taking CENVAT credit: CESTAT

 

By TIOL News Service

MUMBAI, MAR 29, 2018: THE issue is whether the appellant is entitled for CENVAT credit in respect of the mobile cranes imported in the name of partner of the appellant's partnership firm and later the Bill of Entry was endorsed by the partner in favour of the appellant firm.

The lower authorities denied the credit and, therefore, the appellant is in appeal before the CESTAT contending that there is no dispute regarding the receipt and use of the cranes by the partnership firm. Furthermore, since the Bill of Entry has been endorsed in favour of the partnership firm, CENVAT credit is legally admissible to the appellant in view of the decisions in -

(i) Trichem Lab (Bombay) Ltd. – 2016-TIOL-1025-CESTAT-MUM

(ii) SS Cropcare Ltd. – 2016-TIOL-2151-CESTAT-DEL

(iii) Marmagoa Steel Ltd. – 2005-TIOL-239-HC-MUM-CX

(iv) Marmagoa Steel Ltd. – 2008-TIOL-249-SC-CX

The AR supported the order of the lower authority and also mentioned that the appellant is paying mobilization charges to the partner in whose name the cranes were imported. Inasmuch as since the appellant had not paid the value of the crane to the partner,CENVAT credit cannot be taken by the appellant.

The Bench observed –

+ Though the crane was imported in the name of the partner, but the same was received and used by the partnership firm i.e. the appellant.The Bill of Entry was also endorsed by the importer (partner) in favour of the appellant. Therefore, there is no reason to deny the credit to the appellant.

+ As regards the submission of the learned AR that the payment towards the value of imported crane was not made by the appellant to the partner, I am of the view that the payment is not the criteria for taking the cenvat credit. It has been held in various judgments that even in case of job worker, the credit is admissible even though when the job worker does not pay the value of the goods. Applying the same logic and in absence of any provision of payment transaction, cenvat credit cannot be denied to the appellant.

The impugned order was set aside and the appeal was allowed.

(See 2018-TIOL-995-CESTAT-MUM)


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