2015 (2) TMI 1213 - AT - Central Excise

CENVAT credit - excess duty paid by the supplier - Held that - Proviso to Rule 3 of Central Excise Rules, provides that the assessee is entitled to take credit of duty paid on the inputs but the learned AR failed to appreciate the said proviso. Admittedly, the appellant has taken the Cenvat credit of duty paid by them - the appellant has correctly taken the Cenvat credit - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Denial of Cenvat credit on excess duty paid by the supplier.

Analysis:
The appellant filed an appeal against an order denying Cenvat credit on excess duty paid by the supplier. The appellant had availed Cenvat credit on input invoices and paid duty accordingly. The revenue contended that the supplier had paid excess duty, making the appellant ineligible for Cenvat credit on the excess amount. Consequently, the appellant faced denial of Cenvat credit, along with imposition of interest and penalties. The appellant argued that Rule 3 of the Cenvat Credit Rules, 2004 entitled them to take credit on duty paid by the supplier, citing the decision of V.G. Steel Industry. On the other hand, the revenue contended that Rule 3 allowed credit only for duty payable, not duty already paid.

Upon hearing both parties and considering their submissions, it was noted that the proviso to Rule 3 of the Central Excise Rules permits the assessee to take credit of duty paid on inputs. The learned AR failed to appreciate this proviso. The appellant had indeed taken Cenvat credit of the duty they had paid. Consequently, it was held that the appellant had correctly availed the Cenvat credit, and no proceedings against them were warranted. The impugned order was set aside, and the appeal was allowed with any consequential relief deemed necessary. The judgment was dictated and pronounced in open court by the Member (J) Shri Ashok Jindal.