2011 (5) TMI 744 - AT - Central Excise

CENVAT credit - waiver of pre-deposit and stay of recovery denial of credit on the ground that the credit was taken on non-dutiable inputs - appellant submits that the departmental authorities having jurisdiction over their factory cannot enter into the question whether their inputs were excisable or not. According to her, it is enough if the inputs are shown to be duty-paid and covered by proper invoice duly issued under the relevant Central Excise Rule. She submits that these requirements were met in this case Held that - credit in question was taken on the strength of invoices issued under the relevant rule and that the inputs were duty-paid. Apparently, the appellant satisfied the requirements of Rule 3 of the CENVAT Credit Rules, 2004, benefit of CENVAT credit cannot be denied to the appellant, waiver of pre-deposit and stay of recovery allowed

Summary

Issues: Denial of CENVAT credit on non-dutiable inputs

In this case, the appellant sought waiver of pre-deposit and stay of recovery for an amount of duty, interest, and penalty denied by the authorities below. The Revenue contended that the inputs on which the credit was taken were non-dutiable, and action was being taken against the supplier. The learned DR argued that the appellant must establish that duty was leviable on the inputs under the Central Excise Act. On the other hand, the appellant claimed they satisfied legal requirements by availing CENVAT credit based on duty-paid invoices. The appellant's counsel asserted that as long as the inputs were duty-paid and covered by proper invoices, the benefit cannot be denied.

The Tribunal agreed with the appellant's submissions, noting that the credit was taken based on valid invoices showing duty paid on the inputs. The appellant met the requirements of Rule 3 of the CENVAT Credit Rules, 2004, by availing credit of duty paid by the supplier. The crucial aspect was that the inputs were duty-paid and covered by valid invoices, satisfying the conditions for CENVAT credit. The Tribunal emphasized that the benefit of CENVAT credit cannot be denied to the appellant based on the facts presented. Therefore, the Tribunal granted waiver of pre-deposit and stay of recovery for the amounts adjudged against the appellants.