2014 (3) TMI 480 - AT - Central Excise

Denial of Cenvat credit of duty paid on the coal received on the ground that coal supplier should not have paid duty inasmuch as coal was unconditionally exempted vide Notification No. 63/95-C.E., dated 16-3-1995 which was withdrawn with effect from 23-3-2011 - Held that - after having issued the Notification No. 1/2011-C.E., Notification No. 63/95-C.E. which granted unconditional exemption to the coal supplier continued to operate in the field till 23-3-2011 and it was ultimately withdrawn only on the said date. Inasmuch as during the relevant period i.e. from 1-3-2011 to 23-3-2011, both the Notifications were in existence and no fault can be found with the coal supplier to avail Notification No. 1/2011-C.E. Undisputedly, the coal supplier has paid duty and the appellant has availed credit as the same paid by the coal supplier. Even otherwise it is settled that assessment cannot be challenged at the input receiver end - appellant has a good prima facie case in favour of the appellant so as to allow stay petition unconditionally - Stay granted.

Summary

Issues:
Denial of Cenvat credit on duty paid on coal received due to exemption withdrawal.

Analysis:
The judgment pertains to the confirmation of a duty demand against the appellant, amounting to Rs. 58,68,032, by denying them the Cenvat credit of duty paid on coal received. The denial was based on the argument that the coal supplier should not have paid duty as the coal was unconditionally exempted under Notification No. 63/95-C.E., dated 16-3-1995, which was later withdrawn. The appellant contended that another Notification No. 1/2011-C.E. was issued on 1-3-2011, allowing the coal supplier to pay excise duty at 1% without availing credit, which the supplier chose to do. During the relevant period between 1-3-2011 and 23-3-2011, both Notification No. 1/2011-C.E. and Notification No. 63/95-C.E. were in effect. The coal supplier paid duty as per the new notification, and the appellant rightfully availed the credit. The Tribunal held that the appellant had a prima facie case in their favor, as both notifications were operational simultaneously, and the coal supplier acted in accordance with the applicable notification. The Tribunal further emphasized that the assessment cannot be challenged at the input receiver end, supporting the appellant's position.

The Tribunal, considering the straightforward nature of the issue, decided to fix the appeal for final disposal on 26-6-2013. The judgment highlights the importance of compliance with relevant notifications and the legality of availing credit based on the supplier's duty payment in accordance with the applicable regulations. The decision ultimately favored the appellant, acknowledging their valid claim for Cenvat credit on the duty paid by the coal supplier during the period in question.