2008 (1) TMI 777 - AT - Central Excise

Summary

Issues: Denial of credit for invoices dated 28-2-2004 under Cenvat Credit Scheme due to duty reduction from 16% to 8%.

Analysis:
1. The issue in this case revolves around the denial of credit to the appellants for invoices dated 28-2-2004 under the Cenvat Credit Scheme. The Revenue contended that a notification reducing duty from 16% to 8% was issued on the same day the invoices were issued. However, the appellants argued that the manufacturer cleared the goods on the same day at 16% duty, and they availed credit for the same duty. They relied on a Tribunal decision emphasizing that credit rules pertain to duty paid, not duty leviable, as long as the duty paying documents reflect the actual duty paid.

2. The Tribunal analyzed the facts and found that although the duty reduction coincided with the issuance of the invoices and payment at 16%, the appellants rightfully availed credit for the duty paid. The Tribunal held that the denial of full credit to the appellants, as the recipients of the goods, was unjustifiable. Therefore, the Tribunal set aside the impugned order and allowed the appeals, concluding that the appellants were entitled to the credit under the circumstances.

3. The judgment highlights the importance of distinguishing between duty paid and duty leviable in the context of availing credits under the Cenvat Credit Scheme. It emphasizes that as long as the duty paying documents indicate the actual duty paid, recipients should not be denied credit based on subsequent duty reductions. This case serves as a precedent for ensuring that recipients can claim credits based on the duty actually paid, even if duty rates change after the goods are cleared by the manufacturer.