2015 (10) TMI 2210 - AT - Central Excise

Reversal of CENVAT Credit - Whether the appellant is required to reverse the cenvat credit on account of discounts awarded to the appellant after clearance of the goods on payment of duty by the supplier or not - Held that - Whatever duty has been paid by the supplier credit of the same has been taken by the appellant. Further from the facts it is also clear that the supplier of the goods have not claimed the refund of the excess duty paid by the supplier on account of reducing the excess value of the goods in question on whom the appellant has taken the cenvat credit therefore the CBEC Circular No.877/15/2008-CX dated 17.11.2008 clarifies that situation - as the supplier of the goods i.e. M/s. Tata Steels Ltd. has not claimed any refund of the excess duty paid by them in that circumstance the appellant has correctly taken the cenvat credit. With these observations we do not find any merit in the impugned order. The same is set aside - Decided in favour of assessee.

Summary

Issues:
Appeal against order demanding duty, interest, and penalty for excess cenvat credit availed due to discounts given by supplier.

Analysis:
The appellant appealed against an order demanding duty, interest, and penalty for excess cenvat credit availed from June 2008 to December 2013 due to discounts given by the supplier, M/s. Tata Steels Ltd. The dispute arose when the Revenue claimed that the discounts contained a duty element, necessitating the reversal of cenvat credit. The appellant argued that the supplier had paid duty on the inputs, and despite subsequent discounts, the supplier did not claim any refund of the excess duty passed on. The appellant relied on legal precedents and a CBEC Circular to support their claim of entitlement to the cenvat credit. The issue revolved around whether the appellant should reverse cenvat credit due to post-clearance discounts. The CBEC Circular clarified that the duty paid by the manufacturer, as shown in the invoice, would be available as credit even if the price is reduced post-clearance, provided the duty paid is not reduced, and no refund is claimed by the supplier.

In a related case, the Tribunal cited a Supreme Court observation that emphasized the importance of not contesting the duty determined by the supplier's jurisdictional officers. The Tribunal concluded that since M/s. Tata Steels Ltd. did not claim a refund of the excess duty paid, the appellant rightfully availed the cenvat credit. Consequently, the impugned order demanding duty, interest, and penalty was set aside, and the appeal was allowed with any consequential relief.

This detailed analysis highlights the core issue of whether the appellant was required to reverse cenvat credit due to discounts awarded post-clearance, emphasizing the supplier's non-refund of excess duty paid as a crucial factor in determining the appellant's entitlement to the cenvat credit. The legal precedents and circulars cited supported the appellant's position, leading to the Tribunal's decision to set aside the impugned order and allow the appeal.