Tribunal grants relief to Appellant in Cenvat Credit case, Manufacturer bears duty liability

The Tribunal set aside the decision of the Lower Appellate Authority and Adjudicating Authority in a case involving alleged irregular Cenvat Credit availment. The Tribunal ruled in favor of the Appellant, stating that the responsibility to discharge duty liability lies with the manufacturer, not the Appellant. As the goods were purchased from a registered dealer and used in manufacturing final products without dispute on duty payment, the Appellant was entitled to credit without penalty. The Tribunal granted consequential relief to the Appellant, aligning the case with a previous decision.

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Issues: Alleged irregular Cenvat Credit availment in contravention of Rule 9 of Cenvat Credit Rules, 2004.

In this case, a Show Cause Notice was issued alleging irregular Cenvat Credit availment of Rs. 13,100 in violation of Rule 9 of Cenvat Credit Rules, 2004, due to an invoice issued by a First Stage Dealer that did not conform to necessary provisions. The Adjudicating Authority ordered recovery of the credit with interest and imposed a penalty. The Lower Appellate Authority upheld this decision, leading to an appeal before the Tribunal.

The Appellant argued that the goods were purchased from a registered dealer who, in turn, bought them from Indian Oil Corporation Ltd., a government undertaking. The Tribunal found that the goods were purchased from a registered dealer who sourced them from Indian Oil Corporation Ltd. The Tribunal noted that the goods were received by the Appellant and used in manufacturing final products, with no dispute on the payment of Central Excise Duty. The Tribunal referenced a previous decision to support its ruling.

The Tribunal acknowledged that the capital goods were supplied by a registered dealer, and the Appellant was not required to verify the dealer's compliance with the law. It emphasized that the responsibility lies with the manufacturer to discharge duty liability. If the original manufacturer pays the duty subsequently, the Appellant is entitled to credit, and no penalty can be imposed. Consequently, the Tribunal set aside the impugned order, allowing the appeal with consequential relief for the Appellant.

The Tribunal concluded that the facts of the case aligned with the previous decision, leading to the setting aside of the impugned order and allowing the appeal with consequential relief.

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