2014 (2) TMI 698 - AT - Central Excise

Recipient's Right to CENVAT Credit Upheld by Appellate Tribunal

M/s ACE INORGANICS PVT LTD Versus COMMISSIONER OF CENTRAL EXCISE

The Appellate Tribunal CESTAT Ahmedabad ruled in favor of the appellant, allowing them to avail CENVAT Credit on inputs received from the supplier, even ... Waiver of pre-deposit - Cenvat Credit - According to Revenue, no duty was payable but the supplier has paid the duty - the product Zinc Dross, Flux Skimming and Zinc Scaling - Held that:- The rules entitled the recipient manufacturer to avail of the benefit of the duty paid by the supplier manufacturer. - Following decision of MDS Switchgear Ltd. Vs. CCE Aurangabad [2001 (4) TMI 130 - CEGAT, MUMBAI] and upheld by Apex Court in [2008 (8) TMI 37 - SUPREME COURT] Decided in favour of assessee. Issues:- Eligibility to avail CENVAT Credit of Central Excise duty paid on Zinc Dross, Flux Skimming, and Zinc Scaling procured by the appellant from their supplier for the period 2004-2005 to 2008-2009.Analysis:The Appellate Tribunal CESTAT Ahmedabad addressed the issue of eligibility to avail CENVAT Credit of Central Excise duty paid on specific products procured by the appellant from their supplier. The contention was whether the appellant could claim CENVAT Credit even if the supplier was not required to pay Central Excise duty. The Tribunal referred to a previous judgment where a similar issue was decided in favor of the recipient assessee. The Tribunal highlighted that the recipient could claim CENVAT Credit on inputs even if no duty was payable at the supplier's end, citing relevant legal precedents and judgments. The Tribunal emphasized that the recipient was entitled to avail of the benefit of duty paid by the supplier, and the duty amount determined by the supplier could not be challenged by the recipient unit. This interpretation was upheld by the Hon'ble Supreme Court and the High Court of Mumbai, solidifying the recipient's right to claim CENVAT Credit in such circumstances.The Tribunal concluded that the issue in the present case was settled in favor of the assessee based on the legal precedents and judgments discussed. Consequently, the impugned order was deemed unsustainable and set aside. The appeal was allowed in favor of the appellant, granting them the right to avail CENVAT Credit on the inputs received from the supplier. The judgment highlighted the importance of established legal principles and precedents in determining the eligibility of recipients to claim CENVAT Credit, ultimately ruling in favor of the appellant based on the settled law and interpretations provided by previous judicial decisions.