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2008 (5) TMI 49 - AT - Central ExciseCredit was taken of the duty paid on inputs received under cover of invoices from the input-suppliers - According to the department, the price of the goods was subsequently reduced by the supplier, so credit to that extent is not allowable - Cenvat credit taken by the appellants on the strength of the relevant invoice covering purchase of inputs can not be subsequently reduced on the ground that the input-supplier had subsequently reduced the price of the goods
Issues:
Denial of Cenvat credit and penalty imposition. Analysis: The appeal involved the denial of Cenvat credit amounting to Rs. 59,42,219/- for the period August, 2002 to March, 2007, along with the imposition of an equal penalty. The dispute arose from the contention that the price of goods had been reduced by the supplier after the duty was paid on inputs, leading to the question of whether the Cenvat credit could be reduced accordingly. The appellants argued that as per settled law, a manufacturer of final products is entitled to Cenvat credit of duty paid on inputs, supported by statutory invoices. The tribunal considered various decisions supporting this position, including Creative Polypack Ltd. v. Commissioner of Central Excise, Kolkata-II, and others. The tribunal examined the arguments presented by both sides, including references to a circular of the Board and a judgment of the Hon'ble Supreme Court in the case of Maruti Udyog Ltd. The tribunal concluded that neither the circular nor the judgment cited by the respondent were relevant to the issue at hand, as they pertained to the valuation of excisable goods, not the admissibility of Cenvat credit. The crucial question before the tribunal was whether the Cenvat credit taken by the appellants based on the invoices for input purchase could be reduced due to subsequent price reductions by the supplier. Relying on the established legal principle that Cenvat credit of duty paid by the input manufacturer/supplier, as evidenced by invoices, is admissible to the manufacturer of the final product, the tribunal set aside the impugned order and allowed the appeal. In conclusion, the tribunal decided in favor of the appellants, emphasizing the settled legal position that manufacturers of final products are entitled to claim Cenvat credit based on duty paid on inputs, as supported by relevant invoices. The tribunal's decision was based on the established legal precedent and the lack of relevance of the circular and judgment cited by the respondent to the specific issue of Cenvat credit admissibility.
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