2009 (8) TMI 607 - AT - Central Excise

Cenvat credit- whether the assessee is entitled to take Cenvat credit of the amount of duty indicated in the duty paying documents. The ld. Counsel appearing on behalf of the assessee submits that the assessee had availed Cenvat credit on the basis of duty paying documents and in these terms he is not liable to reverse the excess Cenvat credit availed by him. Held that- the assessee is entitled to take the Cenvat credit on the strength of duty paying documents, which was correctly taken by the assessee. In these terms, the appeal of the assessee is allowed and the appeal filed by the revenue are without merit and the same are dismissed.

Summary

Issues:
- Availing Cenvat credit on inputs from a supplier who wrongly passed on excess credit.
- Disputed Cenvat credit utilization for payment of own products.
- Show cause notice issued imposing duty, interest, and penalty.
- Appeals filed by both Revenue and assessee challenging the orders.
- Main issue: Entitlement of the assessee to take Cenvat credit based on duty paying documents.

Analysis:
- The case involved the assessee, a manufacturer of excisable goods, availing Cenvat credit on inputs supplied by a dealer who wrongly passed on excess credit. The supplier had purchased goods from a manufacturer and passed on the credit in violation of rules. The assessee utilized this irregular credit for their own product payments, breaching Cenvat Credit Rules.
- A show cause notice was issued, resulting in duty imposition, interest, and penalty in separate orders. The Revenue filed appeals against the orders, one for upholding duty imposition and another for enhancing the penalty. The assessee also appealed against the confirmation of duty, interest, and penalty.
- The main issue revolved around the entitlement of the assessee to take Cenvat credit based on duty paying documents. The counsel argued that the credit was availed as per these documents, and the excess credit should not be reversed. Citing relevant case laws, it was established that the actual duty paid by the manufacturer is admissible as credit, and buyers are not responsible for ensuring correct payment by the manufacturer.
- Considering the case laws and facts, it was concluded that the assessee was entitled to take Cenvat credit based on the duty paying documents. The appeal of the assessee was allowed, while the Revenue's appeals were dismissed as without merit. The judgment upheld the entitlement of the assessee to the Cenvat credit based on the documents, resolving the main issue in favor of the assessee.