2011 (2) TMI 1049 - AT - Central Excise

Excess Cenvat credit availed - Valuation - as per Revenue authorities incharge of the appellant s factory had conducted valuation of the same and came to the conclusion that the appellant has availed excess Cenvat credit than the actual amount of duty payable as the job-worker has paid excess amount of duty than the duty liable to be paid by them - Held that - It is not in dispute that the supplier in the instant case is falling under the jurisdiction of another Commissioner. As supplier was not issued any show-cause notice by the jurisdictional Revenue authorities asking to show cause as to why the valuation of final productions should not be redetermined. It is also not in dispute that the appellant herein paid the supplier of the amount which was invoiced - judgment of MDS Switchgear Ltd. (2008 (8) TMI 37 - SUPREME COURT) & Purity Flexpack Ltd. 2006 (11) TMI 127 - HIGH COURT GUJARAT AT AHMEDABAD would cover the issue in favour of the assessee, merits in appeal filed by the assessee.

Summary

Issues: Denial of Cenvat credit based on alleged overvaluation by the supplier.

Analysis:
The case involved an appeal against an Order-in-Original passed by the Commissioner of Central Excise & Customs, Nashik. The appellant, engaged in manufacturing excisable goods, availed Cenvat credit on inputs and sent scrap for processing to a job-worker. The Revenue authorities alleged that the appellant had availed excess Cenvat credit due to the job-worker overvaluing the goods cleared from the factory. A show-cause notice was issued, leading to the confirmation of demand, imposition of penalty, and levy of interest. The appellant challenged this order, citing legal precedents to support their case.

The appellant argued that the Revenue authorities at the recipient end cannot contest the value declared by the person discharging the duty paid goods unless the authorities at the discharging unit contest the valuation. They relied on judgments like Commissioner of Central Excise & Customs vs. MDS Switchgear Ltd. and Commissioner of Central Excise & Customs vs. Purity Flexpack Ltd. to bolster their position. On the other hand, the SDR reiterated the findings of the adjudicating authority.

After considering the submissions, the Tribunal focused on the key issue of denying Cenvat credit to the appellant based on the alleged overvaluation by the supplier. It noted that the supplier fell under a different Commissioner's jurisdiction, had not received a show-cause notice on valuation, and the appellant had paid the invoiced amount to the supplier. Citing the legal precedents mentioned earlier, the Tribunal found merit in the appellant's appeal. Consequently, the impugned order was set aside, and the appeal was allowed.