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2014 (10) TMI 54 - AT - Central ExciseCENVAT Credit - Whether appellant is entitled to CENVAT Credit under CENVAT Credit Rules when the inputs are claimed under an Advance Licence for export of finished goods duty free - Held that - Appellants had taken invalidation letter/ARO. These documents were handed over to the suppliers who in turn would have taken the benefit available to them. These have not been cancelled or withdrawn by the appellants. However, it is also observed from the impugned orders itself that the suppliers have not availed the refund of terminal excise duty. We also find from the documents submitted along with the appeal papers that the suppliers have in the relevant years paid very substantial duty from PLA and, therefore, the Revenue s contention regarding shifting of credit does not hold water. Notification No.44/2001-CE (NT), dt.26.06.2001 is an optional procedure for getting duty free inputs. This notification is subject to fulfillment of certain conditions. If the appellant has not fulfilled these conditions, then the raw material has to be received on payment of duty. Once duty is paid on the inputs CENVAT Credit is admissible if not in contravention of CENVAT Credit Rules. Further it has been held that by the relied upon case-laws that duty assessed at the suppliers end cannot be questioned at the recipient s end. Accordingly, appeal filed by the appellant is required to be allowed by setting aside the order passed by the first appellate authority - Decided in favour of assessee.
Issues:
1. Admissibility of CENVAT Credit under CENVAT Credit Rules when inputs are claimed under an Advance Licence for export of finished goods duty-free. Analysis: The appellant filed an appeal against the OIA confirming CENVAT Credit recovery under Rule 12 of the CENVAT Credit Rules 2002/2004, along with interest and equivalent penalty. The appellant argued that they procured inputs against invalidation of Advance Licence for export and took CENVAT Credit, contending it was admissible despite the Revenue's stance. The issue revolved around whether the appellant was entitled to CENVAT Credit under the rules in question. The appellant cited relevant case-laws to support their argument, emphasizing that similar issues had been decided in favor of the assessee in previous judgments. The respondent defended the lower authorities' orders, asserting that credit cannot be availed once Advance Licence invalidation is claimed. After hearing both sides and examining the case records, the Tribunal noted that the issue had been settled in previous judgments, particularly citing the case of Oleofine Organics (India) Pvt.Ltd. Vs CCE Thane-I. The Tribunal analyzed the facts and observations from the mentioned cases, emphasizing that Notification No.44/2001-CE (NT) was an optional procedure for duty-free inputs, subject to specific conditions. It was clarified that if the conditions were not met, duty payment on inputs was required, with admissible CENVAT Credit if compliant with the rules. The Tribunal concluded that the appellant's appeal should be allowed based on the settled legal position and the principles established in the referenced case-laws. It was held that duty assessed at the supplier's end could not be questioned at the recipient's end. Therefore, the order confirming CENVAT Credit recovery was set aside, and the appeal filed by the appellant was allowed. The judgment highlighted the optional nature of the duty-free inputs procedure under the relevant notification and the admissibility of CENVAT Credit under specific circumstances, ultimately ruling in favor of the appellant.
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