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2023 (11) TMI 365 - AT - Central ExciseRecovery of CENVAT Credit - availment of credit on duty discharged by the supplier of copper to them which was dropped by the adjudicating authority - competent reviewing authority has concluded that the respondent was not eligible for availing CENVAT credit as the procurement of such goods on payment of duty is not in concord with scheme of advance licence in the Foreign Trade Policy (FTP) - HELD THAT - The factum of payment of duty by the appellant on procurement of copper is not in dispute. In terms of rule 3 of CENVAT Credit Rules, 2004, with duty liability having been discharged and the procured goods conforming to definition of inputs in rule 2(k) of CENVAT Credit Rules, 2004, there is no ground for disallowance of the said credit. Furthermore, the goods cannot be said to be exempt inasmuch as the notification relied upon in the appeal of Revenue is a non-tariff notification which does not have the effect of section 5A of Central Excise Act, 1944 and is merely procedural and conditional - It is also settled law that it is not open to the central excise authorities having jurisdiction over the buyer to determine leviability to duty of a seller in another jurisdiction. The duty having been discharged by manufacturers of copper who had supplied inputs to the respondent, there is no ground for denial of eligibility for CENVAT credit. Furthermore, the primary contention in the appeal of Revenue is that on identical matter was pending resolution, in their appeal, before the Hon ble High Court of Bombay in COMMISSIONER VERSUS OLEOFINE ORGANICS (INDIA) PVT. LTD. 2015 (10) TMI 650 - BOMBAY HIGH COURT - With the disposal of that appeal, discarding the challenge mounted by Revenue against the order of the Tribunal permitting availment of credit, the grounds of appeal itself ceases to exist. The appeal lacks merit and is, accordingly, dismissed.
Issues involved:
The issues involved in the judgment include the eligibility of availing CENVAT credit, procurement of goods on payment of duty in concordance with the Foreign Trade Policy (FTP), interpretation of notification no. 44/2001-CE (NT), and the jurisdiction of central excise authorities to determine duty liability. Eligibility of Availing CENVAT Credit: The appeal was against the order of the Commissioner of Central Excise, Belapur, regarding the recovery of duty objected to by central excise authorities under rule 14 of CENVAT Credit Rules, 2004. The respondent, a manufacturer of insulated conductors, had procured copper from domestic suppliers on payment of duty. The reviewing authority concluded that the respondent was not eligible for availing CENVAT credit as it was not in line with the scheme of the advance license in the Foreign Trade Policy. However, the Tribunal found that the duty had been discharged by the suppliers, making the credit eligible as per rule 3 of CENVAT Credit Rules, 2004. Procurement of Goods on Payment of Duty in Concordance with FTP: The dispute arose from the respondent's procurement of copper from domestic suppliers on payment of duty, contrary to the advance authorization scheme of the Foreign Trade Policy. The central excise authorities argued that the respondent should have fulfilled export obligations using imported raw materials or supplies from domestic manufacturers without duty payment. The reviewing authority contended that the procurement of goods on payment of duty did not align with the advance license scheme, leading to the initiation of recovery action under CENVAT Credit Rules, 2004. Interpretation of Notification No. 44/2001-CE (NT): The central issue revolved around the interpretation of notification no. 44/2001-CE (NT), which allowed suppliers to clear copper without duty payment. The Tribunal emphasized that the notification did not require the appellants to clear goods duty-free under specific provisions of the Central Excise law. The Tribunal also highlighted that the notification was procedural and conditional, not exempting the goods from duty payment, and ruled in favor of the appellant's eligibility for CENVAT credit. Jurisdiction of Central Excise Authorities: The Tribunal clarified that it was not within the jurisdiction of central excise authorities to determine the duty liability of a seller in another jurisdiction. Referring to a similar case, the Tribunal held that the duty discharge by the manufacturers of copper supplying inputs to the respondent validated the eligibility for CENVAT credit. The Tribunal dismissed the appeal of Revenue, as the challenge against the order permitting credit availment was discarded by the Hon'ble High Court of Bombay in a separate case, thereby eliminating the grounds of appeal.
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