2015 (10) TMI 1208 - AT - Central Excise

Denial of CENVAT Credit - whether the appellant is entitled to take Cenvat credit on the inputs supplied by manufacturer supplier, a 100% EOU through dealer on which the duty has been paid and goods had been received by the appellant or not - Held that - It is admitted fact that appellant have received the goods on which duty has been paid by the manufacture-supplier. Therefore, the appellant has complied with the condition of notification No. 23/03 CE dated 31.3.03 as per Rule 9(5) of the Cenvat Credit Rules, 2004. - In the case of S K Industries P Ltd. (2004 (6) TMI 432 - CESTAT, NEW DELHI) although the goods are supplied by 100% EOU but invoices were issued under Rules 52A and 173G of Central Excise Rules, 1944 which were not having issued it under Rule 100 E ibid i.e. appellant. in the case there. Here the invoices have been issued by 100% EOU under the prescribed Rule, paid duty thereon and goods have been received by the appellant, therefore, the case relied upon by the learned AR have no relevance to the facts of the case. Moreover, the decision of Balakrishna Industries Ltd.(2015 (1) TMI 938 - CESTAT NEW DELHI) , the facts were similar to the facts of this case. In that case also the manufacturer-supplier has taken the benefit of exemption notification No. 44/2001 which was not entitled to and cleared the goods to the manufacturer-supplier which took the Cenvat credit and Revenue sought to deny the said credit Ultimately, this Tribunal came to the conclusion that the manufacturer-supplier is entitled to take cenvat credit. Therefore the facts of this case are squarely covered by the decision of Balakrishna Industries Ltd. (supra). In these circumstances, I hold that appellant has correctly taken the cenvat credit which cannot be denied to them. Therefore, impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
- Appeal against denial of input credit service
- Compliance with notification for availing exemption
- Entitlement to Cenvat credit on inputs supplied by a 100% EOU through a dealer
- Payment of duty on supplied goods

Analysis:

1. Appeal against denial of input credit service:
The appellant, a manufacturer of PET bottles, appealed against the impugned order denying them input credit service. The dispute arose when a show cause notice was issued to the appellant, invoking an extended period of limitation to deny Cenvat credit on the grounds of non-compliance with a specific notification. Both lower authorities had denied the credit, leading to a duty demand confirmation and imposition of penalties. The appellant contended that compliance with the notification was not their concern if the manufacturer-supplier had not fulfilled the conditions. The appellant argued that they had met all necessary conditions under Rule 9(5) of the Cenvat Credit Rules, 2004, and cited relevant case laws to support their position.

2. Compliance with notification for availing exemption:
The crux of the issue was whether the appellant was entitled to take Cenvat credit on inputs supplied by a manufacturer-supplier, a 100% EOU through a dealer, where duty had been paid and goods were received by the appellant. The appellant had received duty-paid goods from the manufacturer-supplier, fulfilling the conditions of the relevant notification. The appellate authority noted that the appellant had complied with the conditions of the notification, thereby justifying their entitlement to the Cenvat credit.

3. Entitlement to Cenvat credit on inputs supplied by a 100% EOU through a dealer:
The appellant's entitlement to Cenvat credit was challenged based on the argument that the manufacturer-supplier had not complied with the notification conditions and had used imported goods in the manufacturing process. The appellate authority rejected this argument, emphasizing that the appellant had received duty-paid goods from the manufacturer-supplier, which met the requirements for claiming Cenvat credit. The authority distinguished previous cases cited by the opposing party, highlighting the specific circumstances of the present case and the compliance of the appellant with the relevant rules.

4. Payment of duty on supplied goods:
The key contention revolved around the payment of duty on the supplied goods and whether the appellant had fulfilled the necessary conditions to claim Cenvat credit. The appellate authority examined the facts of the case, including the payment of duty by the manufacturer-supplier and the receipt of goods by the appellant. By analyzing relevant case laws and precedent, the authority concluded that the appellant had correctly taken the Cenvat credit, overturning the impugned order and allowing the appeal with consequential relief, if any.

In conclusion, the appellate tribunal ruled in favor of the appellant, emphasizing their compliance with the notification conditions and their entitlement to claim Cenvat credit based on the receipt of duty-paid goods from the manufacturer-supplier. The decision was supported by relevant legal provisions and precedents, ultimately setting aside the impugned order and granting relief to the appellant.