2013 (4) TMI 469 - AT - Central Excise

Cenvat Cerdit - Wrong availment - payment of excise duty by the supplier wrongly - Penalty under Rule 15 read with Section 11AC - Held that - in Pricol Ltd. v. CCE (2008 (11) TMI 574 - CESTAT, CHENNAI ) it was held that the buyer is entitled to credit of entire amount of duty paid by it towards supplies of liquid nitrogen gas. There is no dispute about the fact that the appellant has taken CENVAT credit of the duty paid by them. Whether the duty is paid rightly or wrongly, is not the concern of the appellant who is only a recipient of the goods/service. So long as duty is paid either on the goods or the service, appellant is rightly entitled for the credit. This Tribunal in their own case for the previous period has allowed such credit.

Summary

Issues:
- Appeal against Order-in-Appeal denying CENVAT credit for duty paid on facility charges.
- Dispute over receipt of inputs for claiming CENVAT credit.
- Interpretation of CENVAT Credit Rules, 2004.

Analysis:
1. The appeal was filed against an Order-in-Appeal denying CENVAT credit for duty paid on facility charges by the appellant, who received Hydrogen and Argon for welding purposes. The appellant received these gases from another party for mixing before welding, paying charges for the facility provided by the supplier. The department contended that since no goods were physically received, CENVAT credit could not be claimed, leading to a show-cause notice and subsequent confirmation of demand, interest, and penalty by the lower authorities.

2. The appellant argued that they were entitled to the credit as they had paid the excise duty on the facility charges, citing precedents where similar credits were allowed by the Tribunal in cases with identical facts. The appellant sought a stay against the impugned order based on the previous Tribunal decisions, emphasizing that the duty paid should entitle them to claim CENVAT credit under the CENVAT Credit Rules, 2004.

3. The revenue contended that despite discharging duty liability, the appellant did not physically receive any inputs, which according to them, was a prerequisite for claiming CENVAT credit. However, the Tribunal, after considering the submissions from both sides, opined that the issue was straightforward. The Tribunal noted that the appellant had indeed paid the duty, and as a recipient of the goods or service, they were entitled to the credit, irrespective of the correctness of the duty payment. The Tribunal highlighted that as long as duty was paid on the goods or service, the appellant had the right to claim the credit, especially since a previous Tribunal decision had allowed such credit for the appellant in a similar scenario.

4. Ultimately, the Tribunal allowed the appeal, granting consequential relief, if any, to the appellant. The decision was based on the principle that as long as duty was paid by the appellant, they were entitled to claim CENVAT credit under the law, regardless of the physical receipt of goods. The Tribunal also noted the absence of any challenge by the department against the previous Tribunal order allowing such credit, reinforcing the appellant's entitlement to the credit in this case.