2008 (3) TMI 192 - AT - Central Excise

Appellant wins appeal on credit disallowance & penalty imposition under Notification No. 23/2003-C.E.

RUPTEX MINERAL WATER PVT. LTD. Versus COMMISSIONER OF C. EX., JAIPUR

The appellant successfully appealed against the disallowance of credit and penalty imposition under Notification No. 23/2003-C.E. The court ruled in favor ... Credit was disallowed and penalty was imposed on the ground that manufacturer (supplier of inputs) has wrongly cleared the goods in terms of Sl. No. 3 of Notification 23/2003 – use of inputs in mfg. of final excisable good is not disputed - appellant being recipient of the inputs had taken credit as per invoice issued by the manufacturer – appellant’s contention that the inputs cannot be reassessed to duty at recipient end, is acceptable - impugned order is set aside – assessee’s appeal allowed Issues: Disallowance of credit and penalty imposition under Notification No. 23/2003-C.E.Analysis:1. The appellant filed an appeal against an order disallowing the benefit of credit and imposing a penalty based on the incorrect clearance of goods under Sl. No. 3 of the table to Notification No. 23/2003-C.E. The Revenue contended that duty should have been paid as per Sl. No. 2 of the table, not Sl. No. 3, and argued that the appellant, as the recipient of the inputs, wrongly took credit of the duty paid under Sl. No. 3.2. The appellant argued that they are the recipient of dutiable inputs used in excisable goods and had rightfully taken credit based on the manufacturer's invoice. They cited a Supreme Court decision to support their position, emphasizing that the duty on inputs cannot be reassessed at the recipient's end.3. The undisputed facts revealed that the appellant received inputs for manufacturing excisable goods and availed the credit for the duty paid by the manufacturer under Notification No. 23/2003-CE. The Revenue's dispute centered on the manufacturer paying duty under the wrong serial number, but it was established that the assessment cannot be reopened at the recipient's end. As the duty paid by the manufacturer was accepted by the Revenue, the appellant's credit was deemed admissible. Consequently, the impugned order disallowing the credit and imposing a penalty was set aside, and the appeal was allowed.