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2023 (7) TMI 943 - AT - Central ExciseCENVAT Credit - capital goods - Engraved Ms Copper Plated Rollers - denial on the ground that the Capital Goods received by the appellant is exempted at the suppliers end - HELD THAT - There is no dispute on the fact that the supplier are registered with Central Excise, they have duly discharged the payment of Excise duty, they have issued invoices and filed their returns to their Jurisdiction Central Excise Officer. The Jurisdictional Central Excise officer of supplier has not whisper a word about alleged wrong assessment of duty. The department had jolly well accepted the Act of the supplier that is payment of Excise Duty. The self-assessment of payment of excise duty has attained finality as no objection was raised by the department against the supplier. Therefore, rightly or wrongly, if the assessment at the supplier s end has been accepted and no objection was raised, the same cannot be disputed at the recipient of goods for availment of Cenvat credit by the recipient - Since, the payment of duty has been assessed and the same was not challenged the duty was paid by the supplier is in terms of Section 3 of Central Excise Act, 1944 and this duty is clearly, legally available as Cenvat credit to the recipient. Moreover, if the department is of the view that the supplier was not supposed to pay the duty in such case, the jurisdiction Officer at supplier end should have issued a Show Cause Notice for recovery of such amount under Section 11D of Central Excise Act, 1944, which was not done by the department. This further reinforce the claim of the respondent about their Cenvat credit. This issue has been considered time and again in various judgments - reliance can be placed in the case of COMMISSIONER OF CENTRAL EX. CUS., SURAT-III VERSUS CREATIVE ENTERPRISES 2008 (7) TMI 311 - GUJARAT HIGH COURT where it was held that The Tribunal is justified in holding that if the activity of the respondent-assessee does not amount to manufacture there can be no question of levy of duty, and if duty is levied, Modvat credit cannot be denied by holding that there is no manufacture. - The judgment of Hon ble Gujarat High Court has been affirmed by the Hon ble Supreme Court, in COMMISSIONER OF CENTRAL EXCISE CUSTOMS VERSUS MDS SWITCHGEAR LTD. 2008 (8) TMI 37 - SUPREME COURT . The Learned Commissioner (Appeals) has rightly allowed the Cenvat credit on capital goods to the respondent. Hence, the order of the Learned Commissioner is absolutely legal and correct, which does not require any interference - Appeal of Revenue dismissed.
Issues Involved:
1. Entitlement of Cenvat credit on excise duty paid on capital goods. 2. Legitimacy of duty payment under self-assessment. 3. Applicability of limitation period for issuing the Show Cause Notice. Summary: Entitlement of Cenvat Credit on Excise Duty Paid on Capital Goods: The primary issue is whether the respondent is entitled to Cenvat credit for excise duty paid on 'Engraved Ms Copper Plated Rollers' despite the capital goods being exempted from excise duty under Notification No. 49/2006-CE dated 30.12.2006. The department argued that since the capital goods were exempted, any duty paid cannot be treated as excise duty under Section 3 of the Central Excise Act, 1944, thereby disqualifying the respondent from claiming Cenvat credit. Legitimacy of Duty Payment Under Self-Assessment: The respondent contended that the duty was paid under a self-assessment procedure, which was not objected to by the department, thus attaining finality. They argued that once the duty payment is accepted by the department without objection, it cannot later be contested at the recipient's end for Cenvat credit purposes. The tribunal agreed, stating that the self-assessment of excise duty payment by the supplier was accepted by the department, and no objection was raised, making the duty paid under Section 3 of the Central Excise Act, 1944, valid for Cenvat credit. Applicability of Limitation Period for Issuing the Show Cause Notice: The respondent also argued that the Show Cause Notice issued on 09.05.2013 for the period of October 2008 to July 2012 was beyond the one-year limitation period and thus not sustainable. The tribunal noted that there was no suppression of facts by the respondent, and therefore, the extended period for issuing the notice was not applicable. Tribunal's Decision: The tribunal found that the supplier's payment of excise duty was accepted without objection, making it valid for Cenvat credit. The tribunal cited several judgments supporting this view, including MDS Switchgear Ltd. and Creative Enterprises, which established that unless the assessment at the supplier's end is challenged, Cenvat credit at the recipient's end cannot be disputed. The tribunal upheld the order of the Learned Commissioner (Appeals), allowing the Cenvat credit on capital goods to the respondent. The revenue's appeal was dismissed, and the cross-objection filed by the respondent was disposed of. Conclusion: The tribunal concluded that the respondent is entitled to Cenvat credit on the excise duty paid on the capital goods, as the duty payment was accepted by the department without objection. The Show Cause Notice was also found to be issued beyond the permissible period, rendering the demand for Cenvat credit unsustainable. The order of the Learned Commissioner (Appeals) was upheld, and the revenue's appeal was dismissed.
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