2016 (12) TMI 976 - AT - Central Excise

Tribunal affirms cenvat credit on excise duty under Duty Exemption Scheme

CCE & ST, Alwar Versus Alok Industries Ltd.

The Tribunal upheld the Commissioner (Appeals) order in favor of the appellant, confirming their entitlement to avail cenvat credit on central excise ... CENVAT credit - Advance licence - Notification No.44/2001 - Held that: - in the case of M/s. Oleofine Organics (India) Pvt. Ltd. [2013 (7) TMI 157 - CESTAT MUMBAI], where it was held that Rules do not require the appellants to necessarily clear the goods duty free by following the procedure under Notification No. 44/2001-CE(NT) dt 26.6.2001. We also note that overall there is no loss to the Revenue as the credit is being taken of the duty paid - appellant is entitled to avail cenvat credit of central excise duties paid on the inputs - appeal dismissed - decided against Revenue. Issues:- Appeal against order passed by Commissioner of Customs and Central Excise (Appeals), Jaipur regarding cenvat credit eligibility for central excise duty paid on raw materials procured under Duty Exemption Scheme.Analysis:The appellant, engaged in the manufacture of master batches, obtained an advance license under the Duty Exemption Scheme to import raw materials without duty payment. Despite having an invalidation letter from DGFT for duty-free procurement from indigenous manufacturers, the appellant paid duty on raw materials and claimed cenvat credit. The Central Excise Department denied the cenvat credit, leading to adjudication and subsequent appeal. The Commissioner (Appeals) set aside the adjudication order in favor of the appellant, prompting the Revenue to file the present appeal.The Tribunal considered whether the appellant's cenvat credit claim was in line with the Cenvat Statute, citing the precedent set by the case of M/s. Oleofine Organics (India) Pvt. Ltd. vs. Commissioner of Central Excise. Despite the Revenue's contention that the Tribunal's decision and the judgment of the Hon'ble Bombay High Court in the Oleofine case were not accepted and were challenged in the Supreme Court, the Tribunal found that the issue of cenvat credit eligibility for central excise duty paid by the supplier had been conclusively settled. The Tribunal noted that the views endorsed by the Hon'ble Bombay High Court and the Hon'ble Supreme Court in the Oleofine case established the appellant's entitlement to avail cenvat credit on central excise duties paid on inputs. Consequently, the Tribunal upheld the impugned order, ruling in favor of the appellant and dismissing the Revenue's appeal.In conclusion, the Tribunal's decision in this case reaffirms the settled position on cenvat credit eligibility for central excise duty paid on inputs, as established by the precedent set in the Oleofine case and endorsed by higher courts. The judgment emphasizes the importance of adhering to established legal principles and precedents in determining cenvat credit entitlement, providing clarity and certainty in such matters.