2015 (3) TMI 473 - AT - Central Excise

Court upholds respondent's CENVAT Credit claim in landmark ruling

COMMISSIONER OF CENTRAL EXCISE, RAIGAD Versus ISPAT INDIA LTD

The judge dismissed the Revenue's appeal and resolved the respondent's Cross Objection in favor of the respondent. The case centered on the respondent's ... CENVAT Credit - Credit of excess duty paid - held that:- As per the Cenvat Credit Rules, 2004, an assessee is entitled to take credit on actual duty paid at the time of procurement of inputs. In this case, it is not in dispute that the respondent has taken credit of duty paid. Therefore, whether the excess duty paid or not is the issue between the Revenue and the supplier of the inputs. The respondent has taken the credit of actual duty paid. In these circumstances, I do not find any infirmity with the impugned order and hold that the respondent has taken CENVAT Credit correctly. Therefore, the Revenue's appeal deserves no merits hence the same is dismissed -Decided against Revenue. Issues: Appeal against impugned order, Cross Objection by respondent, Procurement of iron ore pellets, Charging excess duty, CENVAT Credit entitlement, Interpretation of Cenvat Credit Rules 2004In the judgment delivered by Ashok Jindal, the Revenue appealed against the impugned order, while the respondent filed a Cross Objection. The case revolved around the respondent procuring iron ore pellets from a supplier who charged duty at 16% instead of reversing the CENVAT Credit taken on the pellets. The Revenue contended that since the supplier paid excess duty, the respondent should not be entitled to credit. The adjudicating authority upheld this view, but the Commissioner (Appeals) set it aside based on a Tribunal decision. The main issue was whether the respondent, who had taken credit for the actual duty paid, could claim credit for the excess duty. The judge noted that under the Cenvat Credit Rules 2004, an assessee can claim credit for the actual duty paid during input procurement. As the respondent had followed this rule by taking credit for the duty paid, the dispute over excess duty was between the Revenue and the supplier. Consequently, the judge found no fault with the respondent's CENVAT Credit claim and dismissed the Revenue's appeal, also disposing of the respondent's Cross Objection accordingly.In the analysis, the judge emphasized the importance of adhering to the Cenvat Credit Rules 2004, which entitle an assessee to claim credit for the actual duty paid when procuring inputs. The judgment clarified that the respondent had correctly taken credit for the duty paid, regardless of any excess duty paid by the supplier. By upholding the respondent's right to the CENVAT Credit, the judge highlighted the distinction between the duties paid by the supplier and the entitlement of the assessee to claim credit based on the actual duty paid during procurement. This interpretation ensured that the respondent's claim was deemed valid, leading to the dismissal of the Revenue's appeal and the resolution of the Cross Objection in favor of the respondent. The judgment underscored the significance of following the prescribed rules and procedures in determining the eligibility of CENVAT Credit, ultimately upholding the respondent's entitlement in this case.