2016 (12) TMI 779 - AT - Central Excise

Tribunal grants Cenvat credit on duty paid inputs, citing Circular & prior orders.

BPL Limited Versus Commissioner of Central Excise, Noida

BPL Limited Versus Commissioner of Central Excise, Noida - TMI Issues:1. Disallowance of Cenvat credit due to reduced prices of inputs.2. Interpretation of Cenvat Credit Rules regarding variation in credit.3. Applicability of Circular No. 877/15/2008 and previous Tribunal orders.4. Comparison of facts with a previous Final Order.5. Decision on appeal challenging Order-in-Appeal disallowing Cenvat credit.Analysis:1. The case involved the disallowance of Cenvat credit by the Revenue due to reduced prices of Colour Picture Tubes (CPT) received by the appellant from suppliers. The Revenue proposed to recover Cenvat credit amounting to Rs. 46,91,242 and impose a penalty based on the issue of debit notes reducing the prices of CPTs.2. The appellant contended that there is no provision in the Cenvat Credit Rules to vary the credit even if the supplier paid more duty. The appellant argued that the duty paid on inputs by the supplier can be availed as credit as long as no refund of Excise duty claimed by the supplier on the account of price reduction. The Original Authority disallowed the Cenvat credit and imposed a penalty, which was upheld in the Order-in-Appeal.3. The appellant relied on Circular No. 877/15/2008 issued by the Central Board of Excise and Customs (C.B.E.C.) to support their argument that duty paid on inputs does not change when credit or debit notes are issued. The appellant also cited a previous Tribunal order which held that Cenvat credit need not be recovered when the assessable value of inputs changes due to debit or credit notes.4. The Departmental Representative (D.R.) agreed that the facts of the case were similar to those in the previous Tribunal order dated 16-08-2016. The Tribunal had passed a Final Order in that case, which was considered relevant to the present appeal.5. After considering the submissions of both parties, the Tribunal found that the issue was already settled in the previous Final Order dated 16-08-2016. The Tribunal held that the appellant was entitled to the Cenvat credit of duty paid on inputs and allowed the appeal, setting aside the impugned Order-in-Original and Order-in-Appeal. The appellant was granted consequential benefits in accordance with the law.