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TMI Blog2013 (9) TMI 383X X X X Extracts X X X X X X X X Extracts X X X X ..... 995 (9) TMI 156 - CEGAT, NEW DELHI] - the fact of the input supplier having taken the Modvat credit fraudulently and having utilized the same for payment of duty on their final product, will not affect the input receiver’s entitlement to the Modvat credit - The remedy lies at the input supplier’s end and not at input receiver’s end. Stay Application - There was merit in the appellants’ plea and the condition of pre-deposit of duty and penalty in both the stay petitions was waived. Difference of Opinion – Member (Technical) was not in consonance of the view of the Member (Judicial) and delivered a separate judgement against the assesse – But the majority view was into the favor of assesse – thus the stay granted unconditionally. - E/435-436/2010 - Stay Order Nos. 56592-56593/2013-EX(BR)(PB) - Dated:- 4-3-2013 - Ms. Archana Wadhwa and Shri Rakesh Kumar, JJ. Shri N. Mullick, Advocate, for the Appellant. Shri I. Baig, DR, for the Respondent. ORDER After hearing both the sides, we proceed to dispose of both the stay petitions together. In all the cases, the demand of duty which stands confirmed against the appellants is to the tune of Rs. 2,04,21,128/-. The said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Metals and the Revenue, even if it is assumed that M/s. Satya Metals has cleared the inputs by utilizing the wrongly availed self-credit by them, the consequence of the same would be that M/s. Satya Metals would be liable to pay duty in respect of the inputs so cleared by them. This would relate to a situation where the credit used by M/s. Satya Metals would be held as inadmissible and they would become liable to pay the duty in cash. This situation would not affect the appellants entitlement to credit of duty paid by M/s. Satya Metals. Inasmuch as M/s. Satya Metals had admittedly cleared the goods on payment of duty, though may be according to the Revenue, by utilizing the wrong credit, the denial of the credit of the same to present applicant would neither be just nor proper, at this prima facie stage. It is well settled law that the assessment done at the input supplier end cannot be changed at the input receiver end. The inputs having been cleared by M/s. Satya Metals on payment of duty, any dispute at their end would not affect the input receiver s entitlement to the credit. Reference in this regard may be made to the Tribunal s decision in the case of R.S. Industries repor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew of the foregoing, we find merits in the appellants plea and dispense with the condition of pre-deposit of duty and penalty in both the stay petitions. The same are accordingly allowed unconditionally. (Pronounced in the open Court) Sd/- (Archana Wadhwa) Member (Judical) 8. [Per : Rakesh Kumar, Member (T)]. - I have heard the order recorded by my learned sister. Since I do not agree with the same, I am recording a separate order. 9. Undisputed facts in this case are that the appellant has received inputs from M/s. Satya Metals which is a 100% EOU located in the area notified in the State of J K for duty exemption under Notification No. 56/2002. There is also no dispute that the supplier of inputs - M/s. Satya Metals, though a 100% EOU, had been availing the benefit of duty exemption under Notification No. 56/2002 and the appellant has availed Cenvat credit in respect of the input received from M/s. Satya Metals in terms of Rule 12 of the Cenvat Credit Rules. The Notification No. 56/2002 is exemption Notification issued u/s 5A of Central Excise Act and exempts the specified goods produced in the areas notified under this Notifications from so much of duty of Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed areas of the State of J K enjoying the duty exemption under Notification No. 56/2002-C.E. in effect does not pay duty to the extent, the duty is required to be paid through PLA after fully exhausting the Cenvat credit available at the end of the month, and in normal circumstances, a manufacture buying goods from such unit for the use as inputs in the manufacture of some final products, would be eligible for Cenvat Credit only to the extent the duty has been paid, i.e., the duty paid through Cenvat credit account, as mentioned above, by virtue of special dispensation under Rule 12 of the Cenvat Credit Rules, 2004, the buyer of the goods is entitled for Cenvat credit in respect of the goods purchased from a unit in J K availing exemption under Notification No. 56/2002-C.E., as if no portion of duty paid was exempted under the said notification. Thus the special dispensation under Rule 12 of Cenvat Credit Rules, 2004 available to an assessee in respect of inputs or capital goods purchased from units located in notified areas of the State of J K for exemption under Notification No. 56/2002-C.E., is linked with the fact as to whether the supplier unit is eligible for the duty exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recovery thereof stayed during pendency of the appeal. Sd/- (Rakesh Kumar) Member (Technical) 12. [Per : Archana Wadhwa, Member (J)]. - After appreciating the order, dictated by my ld. Brother, I would like to express my view on the point that the issue involved in the present appeal is the entitlement of the appellants to Modvat credit paid my M/s. Satya Metals. In my view, to express any opinion on the eligibility or non-eligibility of M/s. Satya Metals entitlements, to the benefit of Notification in their absence, inasmuch as they are not before us, may not be justified. Further, we note that the dispute of M/s. Satya Metals end is before the Hon ble High Court and is sub judice. As such it may not be proper for the Tribunal to adjudge their entitlement to the benefit to the Notification No. 56/2002. Sd/- (Archana Wadhwa) Member (Judicial) DIFFERENCE OF OPINION Whether pre-deposit of the entire amount of duty and penalty involved in both the appeals are required to be dispensed with, as held by Member (Judicial) or the appellants are required to pre-deposit 50% of the duty as a condition of hearing of their appeal, as expressed by Member (Technical). In v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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