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2013 (7) TMI 157 - AT - Central ExciseCenvat Credit - supplier paid the duty on clearance of goods procured locally under ARO or Invalidation Letter - Revenue s contention is that since the appellant along with suppliers were entitled to clear the goods duty free by following the procedure prescribed under Notification No. 44/2001-CE(NT) dated 26.6.2001, the duty paid by the supplier has to be considered as deposit with Government and the appellants are not entitled to avail the credit of the same. - Held that - Rules do not require the appellants to necessarily clear the goods duty free by following the procedure under Notification No. 44/2001-CE(NT) dt 26.6.2001. We also note that overall there is no loss to the Revenue as the credit is being taken of the duty paid. - the issue is exactly the same as directed by the Tribunal in the case of Shakun Polymers Ltd. Vs. CCE 2009 (3) TMI 693 - CESTAT, AHMEDABAD - Decided in favor of Assessee.
Issues involved:
1. Interpretation of Notification No. 44/2001-CE(NT) dated 26.6.2001 regarding duty-free clearances. 2. Entitlement to Cenvat Credit on duty paid by suppliers. 3. Compliance with prescribed procedures for availing duty exemptions. 4. Applicability of Tribunal judgments in similar cases. Analysis: 1. The case involved the interpretation of Notification No. 44/2001-CE(NT) dated 26.6.2001 concerning duty-free clearances against Advance License/Advance Authorization. The appellants procured raw materials locally under Advance Release Order (ARO) or Invalidation letter issued by DGFT. The dispute arose as the appellants did not follow the prescribed procedure under the Notification, leading to demands for Cenvat Credit taken on duty paid by suppliers. 2. The main contention was that the appellants were not willing to comply with the Notification's procedure, and thus, the suppliers did not avail the duty-free clearance benefit. The argument emphasized that the duty paid by suppliers should be credited to the receivers. The Tribunal referred to past judgments supporting the receivers' right to claim credit for duty paid by suppliers. 3. The Revenue contended that since both appellants and suppliers were eligible for duty-free clearances under the Notification, the duty paid by suppliers should be considered as a deposit with the Government, and appellants should not avail Cenvat Credit on the same. The argument highlighted the obligation to follow the prescribed procedure for duty exemptions. 4. The Tribunal analyzed the facts, noting that the suppliers did not avail the refund of terminal excise duty, and the suppliers had paid substantial duty from PLA. It was observed that the appellants were not mandated by Central Excise law to clear goods duty-free under the specific Notification. The Tribunal distinguished previous judgments cited by the Revenue, stating they were not relevant to the present case. Ultimately, the Tribunal allowed both appeals based on the analysis provided and the lack of loss to Revenue due to the credit being taken on duty paid. In conclusion, the Tribunal's decision favored the appellants, emphasizing the absence of a legal obligation to follow the Notification's prescribed procedure and the right to claim Cenvat Credit on duty paid by suppliers. The judgment highlighted the specific circumstances of the case and the lack of loss to Revenue, leading to the allowance of both appeals.
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