2016 (5) TMI 1239 - AT - Central Excise

Eligibility of Cenvat credit - received material from HMIL and had paid duty which was indicated in the invoice - took credit based on the proper invoice issued by HMIL - HMIL paid the said duty and the goods were cleared under the cover of the said invoice - Held that - the appellant s contention is that there is nothing on record to show that the assessment of HMIL has been questioned by their jurisdictional officers, it would not be proper for any other officer to comment on the said payment has not been stated to be wrong or an erroneous proposition of law by the Revenue and therefore accepted. Therefore, by applying the decision of Hon ble Supreme Court in the case of CCE Vs. MDS Switchgear Ltd. 2008 (8) TMI 37 - SUPREME COURT , the impugned order is liable to be set aside. It is found from the original authority s order that he is not able to ascertain the correct amount of credit taken by HMIL and the correct amount which is required to be reversed by HMIL, when that is the position, it is not known as to how he can come to a conclusion that the appellant is not eligible to take credit of the amount mentioned in the invoice. As rightly pointed out by the appellant that the jurisdictional officers of HMIL have not disputed the duty paid and the alleged excess payment has not been granted as refund. Therefore, both the lower authorities have erred in denying the credit to the appellant. Period of limitation - Invokation of proviso to Section 11A(1) of the Central Excise Act, 1944 - appellant availed the credit based on the duty amount paid by HMI as mentioned in the invoice - Held that - when there is no dispute with regard to the payment of duty by HMIL, the same cannot be denied to the appellant. The instant case pertains to a situation where there is an excess payment of duty. Extended period can be invoked only when there is an intentional failure to pay duty which is not the case here. The appeal succeeds on limitation also as no credit in excess of the amount mentioned in the invoice was taken by them. - Decided in favour of appellant

Summary

Issues:
1. Denial of CENVAT credit on steel coils by Deputy Commissioner of Central Excise.
2. Confirmation of demand and penalty by Deputy Commissioner.
3. Rejection of appeal by Commissioner of Central Excise (Appeals).
4. Validity of availing credit by the appellant based on the duty paid by another party.
5. Dispute over excess payment of duty and invocation of larger period.
6. Relevance of legal precedents cited by both parties.
7. Jurisdictional dispute over assessment of duty paid by another party.
8. Correctness of denying credit to the appellant.
9. Incorrectness of lower authorities in denying credit to the appellant.
10. Application of limitation period and intentional failure to pay duty.

Analysis:
1. The Deputy Commissioner issued a show cause notice seeking to deny CENVAT credit on steel coils, alleging the appellant wrongly availed credit during March 2009, demanding the credit, interest, and penalty.
2. The appellant contested the allegations in the show cause notice through a reply.
3. Deputy Commissioner confirmed the demand and penalty, which was upheld by the Commissioner of Central Excise (Appeals).
4. The appellant argued that they availed credit based on a valid invoice from another party, HMIL, and the duty paid was not disputed by the jurisdictional officers.
5. The appellant defended their position stating that the excess payment of duty by HMIL was not a valid reason to deny credit and invoked legal precedents to support their case.
6. The AR contended that the excess payment should not be considered for credit, emphasizing self-assessment and the duty of the assessee to discharge their burden.
7. The appellant differentiated their case from a legal precedent cited by the AR, highlighting the lack of dispute over the payment by HMIL.
8. The Tribunal found that the appellant rightfully availed credit based on the duty paid by HMIL, and the assessment of HMIL was not questioned by their jurisdictional officers.
9. The lower authorities were criticized for not considering the lack of dispute over duty payment by HMIL and erred in denying credit to the appellant.
10. The Tribunal ruled in favor of the appellant on both merit and limitation, stating that the denial of credit was incorrect, and there was no intentional failure to pay duty.

This detailed analysis of the judgment showcases the issues involved, the arguments presented by both parties, the legal precedents cited, and the final ruling by the Tribunal in favor of the appellant.