2015 (10) TMI 1137 - AT - Central Excise

Denial of CENVAT Credit - Imposition of penalty - Held that - Supreme Court in the case of MDS Switchgear Limited (2008 (8) TMI 37 - SUPREME COURT ) held that the Respondent manufacturer, to avail the benefit of CENVAT credit paid by the supplier manufacturer is to the quantum of duty already determined by the jurisdictional Revenue officers of the supplier unit, cannot be contested or challenged by the officers in charge of recipient unit. In view of that, I do not find any reason to interfere the order of the Commissioner (Appeals). - Decided against Revenue.

Summary

Issues:
- Appeal against orders passed by the Commissioner (Appeals) regarding CENVAT credit on inputs for manufacturing Acrylic Polymers and Vinyl Polymers under Chapter 39 of the Central Excise Tariff Act, 1985.
- Dispute over the amount of duty paid by the supplier of inputs affecting the CENVAT credit availed by the respondent.
- Applicability of the decision in the case of Commissioner of Central Excise & Customs vs. MDS Switchgear Limited - 2008 (229) ELT 485 (S.C.) to the present case.

Analysis:
1. The appeals were filed by the Revenue against the orders passed by the Commissioner (Appeals) concerning the availing of CENVAT credit on inputs for manufacturing Acrylic Polymers and Vinyl Polymers. The respondent, engaged in manufacturing, received inputs from another unit, paying duty under transaction value. The adjudicating authority raised a demand, contending that the supplier should have paid duty on the amount initially availed as credit. Penalties were imposed on the respondent and its Managing Director. However, the Commissioner (Appeals) allowed the appeals filed by the respondent, leading to the Revenue's appeals.

2. The main contention raised by the Revenue was that the CENVAT credit should be limited to the amount of credit initially availed by the supplier. On the other hand, the respondent relied on the decision of the Hon'ble Supreme Court in the case of Commissioner of Central Excise & Customs vs. MDS Switchgear Limited. The Tribunal noted that the Supreme Court in the MDS Switchgear case held that the recipient unit cannot challenge the duty determined by the Revenue officers of the supplier unit to avail CENVAT credit. Therefore, the Tribunal found no grounds to interfere with the Commissioner (Appeals)'s order and rejected the appeals filed by the Revenue.

3. The Tribunal's decision was based on the principle established in the MDS Switchgear case, emphasizing that the quantum of duty determined by the supplier's Revenue officers is conclusive for availing CENVAT credit by the recipient unit. As a result, the Tribunal upheld the Commissioner (Appeals)'s decision, highlighting the importance of adhering to the duty determination by the supplier unit's jurisdictional Revenue officers. Consequently, the appeals filed by the Revenue were dismissed, affirming the respondent's position regarding the availed CENVAT credit on inputs for manufacturing Acrylic Polymers and Vinyl Polymers.

This comprehensive analysis outlines the key issues, arguments presented, relevant legal precedents, and the Tribunal's decision in the case, providing a detailed understanding of the judgment's implications and reasoning.