2014 (3) TMI 1084 - AT - Central Excise

CENVAT credit - manufacture of cement - denial on the ground that the inputs were exempted under N/N. 6/2006-C.E., dated 1-3-2006 and the manufacture, of the same should not have paid the duty on the said part - Held that - Cenvat credit of duty paid is available to the recipient of the inputs. The assessment done at the input supplier end cannot be re-opened at the input recipient end - credit allowed - decided in favor of assessee.

Summary

Issues Involved:
Denial of Cenvat credit on duty paid inputs under an exemption notification.

Analysis:
The appeals under consideration were related to the denial of Cenvat credit on duty paid inputs due to the inputs being exempted under Notification No. 6/2006-C.E. The manufacturer, engaged in the production of various goods, had availed the Cenvat credit, which the Revenue sought to deny. The Revenue argued that since the inputs were exempted, the duty paid on them should not have been paid by the manufacturer, and thus, the credit availed by the appellants was being denied along with the imposition of penalties. However, the tribunal found that the law is clear on the matter that Cenvat credit of duty "paid" is available to the recipient of the inputs, and the assessment done at the input supplier's end cannot be revisited at the input recipient's end.

In support of this proposition, the tribunal referenced the decisions of the Hon'ble High Court of Madras in the case of CCE, Chennai-I v. CEGAT, Chennai-I [2006 (202) E.L.T. 753 (Mad.)] and the Hon'ble High Court of Punjab and Haryana in the case of CCE, Chandigarh v. Ranbaxy Labs. Ltd. [2006 (203) E.L.T. 213 (P & H)]. By following the precedents set by these judgments, the tribunal set aside the impugned orders and allowed the appeals, providing consequential relief to the appellants. The judgment clarified the principle that Cenvat credit on duty paid inputs is rightfully available to the recipient, regardless of the exemption status of the inputs under relevant notifications.