2024 (12) TMI 1019 - HC - Central Excise

Denial of CENVAT Credit on Engraved Printing Cylinder Copper Engraved Cylinder - denial on the ground that such Cylinder were not liable to pay the excise duty although the supplier from whom the Respondent-Assessee has purchased these goods has wrongly paid the duty, since these goods were exempted and no duty was required to be paid by the supplier - HELD THAT - The Tribunal in paragraph 4 of its order has given a finding that there is no evidence on record that the payment of duty by the supplier was questioned / challenged / disputed by their jurisdictional officer and since the payment of duty by the supplier is found to be legal and correct, the Respondent-Assessee cannot be denied benefit of CENVAT credit. The learned counsel for the Appellant-Revenue has not challenged this finding of fact as incorrect. Therefore, on this very limited ground since these findings are not challenged and this being a finding of fact rendered by the final fact finding authority, no substantial questions of law can be said to arise from the impugned Tribunal s order. Secondly, the Tribunal in the impugned order has followed the decision of this Court in the case of THE COMMISSIONER, CENTRAL EXCISE GOA, VERSUS M/S. NESTLE INDIA LTD., 2011 (6) TMI 164 - BOMBAY HIGH COURT and its own decision in the case of C.C.E. S.T. -VAPI VERSUS KRIS FLEXIPACKS PVT LTD (VICE-VERSA) 2023 (7) TMI 943 - CESTAT AHMEDABAD . Nothing has been brought to our notice that the decision of the Tribunal in the case of Kris Flexipacks Pvt. Ltd. has been challenged by the Appellant-Revenue before the higher forum. Therefore, even on this count, no substantial questions of law would arise since the order of the Tribunal in the case of Kris Flexipacks Pvt. Ltd. has been accepted. The appeal of the Appellant-Revenue is dismissed.

Summary

Issues:
1. Whether CENVAT Credit on specific cylinders can be denied when they were exempted from duty?
2. Whether the Tribunal erred in dropping the duty demand of wrongly availed CENVAT Credit?
3. Whether the confessional statement is sufficient to prove wrong availment of CENVAT Credit?

Analysis:
Issue 1: The main issue is whether CENVAT Credit on "Engraved Printing Cylinder" and "Copper Engraved Cylinder" can be denied to the Assessee when these cylinders were exempted from duty. The Tribunal found that since the duty payment by the supplier was legal and correct, the Assessee cannot be denied the CENVAT credit. The Appellant did not challenge this finding, and as it is a finding of fact by the final authority, no substantial question of law arises.

Issue 2: The Appellant questioned the dropping of the duty demand of wrongly availed CENVAT Credit by the Tribunal. However, the Tribunal based its decision on precedents from the High Courts and its own previous decisions. The Tribunal held that if the duty payment is not challenged or questioned, the recipient of the goods cannot be questioned for availing the credit. The Appellant did not show any perversity in this approach, and hence, no substantial question of law arises.

Issue 3: The Appellant also raised the issue of the sufficiency of the confessional statement to prove the wrong availment of CENVAT Credit. The Respondent relied on a previous decision where the appeal of the Revenue was dismissed based on similar facts. The Court, based on the decisions of Co-ordinate Benches and previous judgments, concluded that no substantial questions of law arise from the Tribunal's order. Therefore, the appeal of the Appellant-Revenue was dismissed.