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2006 (11) TMI 127 - HC - Central ExciseAssessee, receiver of inputs from manufacturer - manufacturer of inputs on his own paid duty at the rate of 24% instead of 16% - credit at the higher rate paid on inputs available to assessee or not - duty was paid by the supplier at the rate of 24% and added in the cost, which has been paid by the assessee, we see no infirmity in the order of the Tribunal allowing that part of duty for the purpose of CENVAT credit - appeal stands dismissed
Issues:
Entitlement to CENVAT credit at a higher rate paid on inputs by the manufacturer. Analysis: The High Court of Gujarat at Ahmedabad deliberated on the issue of whether the respondent is entitled to CENVAT credit at a higher rate paid on inputs by the manufacturer. The Tribunal considered the matter and noted that the respondents had availed modvat credit of duty paid by the supplier on inputs at a rate of 24%, while the revenue contended that the supplier should have paid duty at 16%. However, since no dispute was initiated by the revenue at the supplier's end, the duty paid by the manufacturer was deemed eligible for availing as Modvat credit at the receiver's end. The Tribunal upheld the decision of the Commissioner (Appeals) based on the precedent set in the case of Siddarth Petro Products Vs. Commissioner of Central Excise, stating that the Central Excise authorities cannot dispute the duty liability of the inputs supplier and restrict the credit based on the amount of duty paid by the manufacturer. Furthermore, the High Court found no fault in the Tribunal's decision to allow the part of duty paid by the supplier at 24% for the purpose of CENVAT credit, as it was added to the cost and paid by the assessee. Consequently, the appeal filed by the revenue was rejected, and the order of the Tribunal granting CENVAT credit at the higher rate was upheld. The Court dismissed the appeal, affirming the decision in favor of the respondent regarding the entitlement to CENVAT credit at the rate paid by the manufacturer on inputs.
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