2014 (8) TMI 571 - AT - Central Excise

Tribunal allows stay applications without pre-deposit, clarifies Cenvat credit & duty payment rules

The Tribunal allowed the stay applications without pre-deposit of dues against the appellants, dismissing the miscellaneous application. The judgment ... Benefit of Cenvat credit - Assessee manufacturers of vehicles and were purchasing the various forgings from the market - Forgings were being sent by them to their job workers M/s Eicher Engineering Components Ltd., in terms of the provisions of Rule 4(5)(a) - Assessee has again taken credit of the duty paid by M/s Eicher Engineering Components Ltd - Held that:- admittedly M/s Eicher Engineering Components Ltd. had 'paid' the duty and M/s V.E. Commercial Vehicles Ltd. has availed the duty paid by M/s Eicher Engineering Components Ltd. It is well settled law that the credit of duty 'paid and not payable' is available. The entire situation is revenue neutral. Tribunal in the case of Bharat Heavy Electricals Ltd. vs. CCE & ST, Meerut-I vide [2014 (3) TMI 203 - CESTAT NEW DELHI] has dealt with an identical situation and has held in favour of the assessee. By following the same, we dispense with the condition of pre-deposit of dues against the appellants and allow both the stay applications - Stay granted. Issues:1. Availing Cenvat credit on duty paid forgings.2. Dispute regarding duty payment by job worker.3. Denial of credit and imposition of penalties.4. Miscellaneous application for listing the stay petition.Analysis:1. The case involves M/s V.E. Commercial Vehicles Ltd., manufacturers of vehicles, purchasing forgings and availing Cenvat credit. The forgings were sent to job workers M/s Eicher Engineering Components Ltd. The job worker chose to pay duty on the forgings instead of returning them without payment. M/s V.E. Commercial Vehicles Ltd. then took credit for the duty paid by the job worker.2. The revenue contended that the job worker should not have paid duty and the manufacturer should not have taken the credit. Consequently, credit was denied to the manufacturer, and penalties were imposed on both parties.3. The Tribunal found that the job worker had indeed paid the duty, and the manufacturer had availed the credit. It was established that the credit of duty 'paid and not payable' is permissible, maintaining revenue neutrality. Referring to a similar case involving Bharat Heavy Electricals Ltd., where the Tribunal ruled in favor of the assessee, the Tribunal allowed the stay applications without pre-deposit of dues against the appellants, dismissing the miscellaneous application.4. The miscellaneous application for listing the stay petition at an early date was disposed of, and the decision was dictated and pronounced in open court by the judges Archana Wadhwa and Rakesh Kumar.This judgment clarifies the principles of availing Cenvat credit, duty payment by job workers, and the availability of credit in revenue-neutral situations, providing a legal precedent for similar cases.