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2015 (10) TMI 122 - AT - Central ExciseDenial of CENVAT Credit - Exemption Notification No. 63/95-CE dated 16/3/95 - penalty imposed on them under Rule 15 (2) - Reopening of assessment - Held that - During the period of dispute, that is from 01/3/11 to 23/3/11, the coal received by the appellant from Coal India Ltd. was fully exempt from duty under Notification No. 63/95-CE dated 16/3/95 and at the same time duty @ 1% adv. has been imposed by Notification No. 1/11-CE subject to condition that no Cenvat credit is taken and duty @5% has been imposed under Notification No. 2/11-CE with Cenvat credit. The We find that this issue stands decided against the Department by the Apex court judgment in the case of MDS Switchgear reported in 2008 (8) TMI 37 - SUPREME COURT and same view has been taken by Hon ble Punjab & Haryana High Court in the cases of CCE, Chandigarh vs. Ranbaxy Labs Ltd. reported in 2006 (7) TMI 216 - HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH and in the case of V.G. Steel Industry vs. CCE reported in 2011 (5) TMI 154 - Punjab and Haryana High Court holding that the assessments made at the supplier s end cannot be reopened at the recipient s end and on this basis the Cenvat credit of the duty paid by the supplier cannot be denied to the recipient. In view of this, the impugned order is not sustainable. The same is set aside. - Decided in favour of assessee.
Issues:
Interpretation of Notification No. 63/95-CE dated 16/3/95 and subsequent Notifications No. 1/11-CE and 2/11-CE dated 01/3/11, Cenvat credit eligibility, Duty exemption on coal, Assessment at supplier's end affecting recipient's Cenvat credit. Detailed Analysis: 1. Interpretation of Notification No. 63/95-CE and subsequent Notifications: The case involved a dispute regarding the duty exemption on coal under various notifications during the period from 1/3/11 to 23/3/11. Notification No. 63/95-CE dated 16/3/95 provided full duty exemption for coal produced in mines. However, Notifications No. 1/11-CE and 2/11-CE dated 01/3/11 imposed duty rates of 1% and 5% on coal, respectively, with or without Cenvat credit. The subsequent Notification No. 29/2011 dated 24/3/11 amended the earlier exemption, withdrawing full duty exemption during the disputed period. 2. Cenvat Credit Eligibility and Assessment at Supplier's End: The Department contended that since the coal supplied by Coal India Ltd. to the appellant was fully exempt during the disputed period, no duty should have been paid by the supplier, and any amount paid should be treated as a deposit. Consequently, the Department sought to deny Cenvat credit to the appellant based on this premise. However, legal precedents, including the Apex court judgment in the case of MDS Switchgear and judgments from the Punjab & Haryana High Court, established that assessments made at the supplier's end cannot affect the recipient's Cenvat credit eligibility. The recipient cannot be denied Cenvat credit by reopening assessments at the supplier's end. 3. Judgment and Conclusion: The Tribunal, considering the legal precedents and the specific circumstances of the case, set aside the Cenvat credit demand imposed on the appellant. The Tribunal held that the assessments made at the supplier's end cannot impact the recipient's right to claim Cenvat credit on duty paid by the supplier. Therefore, the impugned order denying Cenvat credit to the appellant was deemed unsustainable and was overturned. The appeal was allowed in favor of the appellant, and the Cross Objection filed by the Revenue was also disposed of accordingly. In summary, the judgment clarified the interpretation of relevant notifications, affirmed the recipient's right to claim Cenvat credit irrespective of duty exemptions at the supplier's end, and set aside the Cenvat credit demand imposed on the appellant.
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