2019 (3) TMI 1175 - AT - Central Excise

CENVAT Credit - inputs under Section 11A of the Central Excise Act read with Rule 14 of the CCR - demand on the ground that the duty paid on inputs is in excess of the actual duty liability and the said excess duty has been wrongly taken as CENVAT credit - Held that - The appellants have purchased the inputs from its sister concern situated in Perembra and has taken the CENVAT credit on the basis of invoice issued by the sister concern - Also the appellant has taken the CENVAT credit on the duty actually paid by them to the sister concern - In the case of CCE v. MDS Switchgear Ltd., 2008 (8) TMI 37 - SUPREME COURT , the Apex Court has held that recipient manufacturer is entitled to avail the benefit of duty and quantum of duty already determined by the jurisdictional officer of the supplier unit cannot be contested or challenged by the officer incharge of the recipient unit. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Appeal against rejection of CENVAT credit availed on inputs
- Interpretation of CENVAT credit rules and duty payment
- Applicability of judicial precedents in determining CENVAT credit eligibility

Analysis:
1. Appeal against rejection of CENVAT credit availed on inputs:
The appellant, engaged in manufacturing automotive tyres, availed CENVAT credit on inputs purchased for tyre production. The dispute arose when the appellant received inputs from a sister concern and claimed CENVAT credit on the duty actually paid. The original authority confirmed the demand for CENVAT credit but dropped the penalty. The Commissioner upheld the decision, leading to the present appeal.

2. Interpretation of CENVAT credit rules and duty payment:
The appellant argued that the impugned order failed to appreciate the law and facts correctly. They contended that the credit was taken on duty actually paid, making the issue revenue neutral. The appellant cited judicial precedents supporting their position, emphasizing that the credit should not be limited to the duty leviable on inputs. The appellant's position was that the credit availed was legitimate and within the scope of the law.

3. Applicability of judicial precedents in determining CENVAT credit eligibility:
The Tribunal analyzed various decisions, including IPF Vikram India Ltd., V.G. Steel Industry, and Cipla Ltd., which favored the assessee's right to claim CENVAT credit on duty paid on inputs. Referring to the case of CCE v. MDS Switchgear Ltd., the Tribunal highlighted the recipient's entitlement to benefit from the duty paid by the supplier, as determined by the supplier's jurisdictional officer. By aligning with the principles established in the cited cases, the Tribunal concluded that the impugned order was unsustainable in law. Consequently, the Tribunal set aside the order, allowing the appellant's appeal.

In conclusion, the Tribunal's decision favored the appellant by recognizing their entitlement to claim CENVAT credit on inputs based on the duty actually paid, as supported by legal precedents and established principles of CENVAT credit rules.