2024 (2) TMI 954 - AT - Central Excise

Availment of cenvat credit - Ferro Manganese Slag and Silico Manganese Slag received by the appellant from the supplier upon payment of duty - whether the said goods are exempt goods or not - HELD THAT - It is observed that the impugned issue came up before the Hon ble Apex Court in the case of COMMISSIONER OF CENTRAL EXCISE CUSTOMS VERSUS MDS SWITCHGEAR LTD. 2008 (8) TMI 37 - SUPREME COURT , wherein the Hon ble Apex Court has held The rules entitled the receipt manufacturer to avail of the benefit of the duty paid by the supplier manufacturer. A quantum of duty already determined by the jurisdictional officers of the supplier unit cannot be contested or challenged by the officers in charge of recipient unit - The issue is settled in favour of the appellant and is no more res-integra. The appeal filed by the appellant is hereby allowed and the orders of the lower authorities are set aside.

Summary

Issues involved:
The appeal before the Appellate Tribunal CESTAT Kolkata involves the issue of availment of cenvat credit on Ferro Manganese Slag and Silico Manganese Slag, which were received by the appellant from the supplier with duty paid invoices, even though the goods were initially exempted from duty payment. The appellant argues that they were entitled to avail the credit as they paid duty as charged, while the Revenue contends that since the goods were exempted, cenvat credit should not be availed.

Details of the Judgment:
The Tribunal referred to a decision by the Hon'ble Apex Court in Commissioner of Central Excise & Customs Vs. MDS Switchgear Limited, where it was emphasized that the duty paid by the supplier manufacturer should be accepted by the recipient for cenvat credit, and the recipient cannot be faulted for taking such credit if duty has been paid. Subsequently, the Tribunal cited a case involving Neuland Laboratories Limited, where it was reiterated that the assessing officer of the recipient cannot question whether duty was payable on the supplied goods, but only verify if duty has been paid by the supplier. The Tribunal also highlighted a Board Circular which states that if an assessee pays duty on exempted goods, the amount recovered as duty must be deposited with the Central Government, but the Circular's application must consider the implications on the assessee.

Therefore, based on the legal precedents and the interpretation of the Cenvat Credit Rules, the Tribunal concluded that the issue is settled in favor of the appellant. Consequently, the appeal was allowed, and the orders of the lower authorities were set aside.

This judgment clarifies the principles regarding the availment of cenvat credit on goods initially exempted from duty payment, emphasizing the importance of duty payment by the supplier and the recipient's entitlement to credit based on such payment.