2023 (10) TMI 164 - AT - Central Excise

CENVAT Credit on duty wrongly paid - Classification of goods - printing cylinder - classified under Chapter heading No. 84425010 or not - exemption under Notification No. 49/2006-CE dated 31.12.2006 - whether supplier of printing cylinder was not supposed to pay the duty as the same were exempted under Notification No. 49/2006-CE dated 31.12.2006? - HELD THAT - From the clarification vide letter F. No. V/Tal/DFA/SCN/Accuprint/08-13-14 dated 08.08.2003 given to the supplier of the Rotogravure Printing Cylinder, there is no ambiguity that the supplier have correctly paid the duty without availing the Exemption Notification 49/2006-CE dated 30.12.2006. The entire basis for denial of the credit is on the view which was completely contrary to the clarification given in the above letter dated 08.08.2013. It is found that it is the supplier s Jurisdictional Officers who have to assess whether duty was correctly paid or otherwise and the same has been clarified by the supplier s jurisdictional officer. The jurisdictional officer of the appellant has no jurisdiction to question the assessment or correctness of the payment of duty. Thus, the appellant have correctly availed the cenvat credit on the Rotogravure Printing Cylinder supplied by M/s Accuprints System. Hence the demand is not sustainable - appeal allowed.

Summary

Issues:
The issues involved in this case are the denial of cenvat credit to the appellant based on the contention that the printing cylinders procured by the appellant were exempted under Notification No. 49/2006-CE dated 31.12.2006, and the eligibility of the appellant for cenvat credit of duty paid by the supplier.

Denial of Cenvat Credit:
The appellant, engaged in manufacturing packaging material, procured printing cylinders required for production from a supplier who cleared the cylinders on payment of duty. The department contended that the printing cylinders were exempted under Notification No. 49/2006-CE and hence the duty paid by the supplier was not supposed to be paid. Consequently, the appellant was denied cenvat credit of such duty. However, the appellant argued that the denial was incorrect as clarified by the supplier's jurisdictional Chief Commissioner, stating that the duty was correctly paid by the supplier without availing the exemption. The appellant cited previous orders where cenvat credit was allowed on the same issue, which were accepted by the department.

Jurisdictional Clarification:
The Tribunal noted that the supplier's jurisdictional officer had clarified that the duty on the printing cylinders was correctly paid without availing the exemption. The Tribunal emphasized that the jurisdictional officer of the supplier, not the appellant's jurisdictional officer, was responsible for assessing the correctness of duty payment. Relying on this clarification, the Tribunal held that the denial of cenvat credit to the appellant was unfounded. Consequently, the impugned order was set aside, and the appeal was allowed.

Conclusion:
The Tribunal found that the denial of cenvat credit to the appellant based on the duty payment by the supplier was erroneous, as clarified by the supplier's jurisdictional officer. The Tribunal emphasized the importance of jurisdictional officers in assessing duty payment correctness and ruled in favor of the appellant, allowing the appeal and setting aside the impugned order.