Tribunal grants duty credit on Pig Lead Ingots, emphasizing purchaser's right to CENVAT credit

The Tribunal allowed the appeal, holding that the appellant was entitled to the credit of duty paid by the input supplier on the Pig Lead Ingots. Relying on legal precedents, the Tribunal emphasized that if duties are accepted without dispute, the credit should not be denied to the purchaser meeting all conditions for availing CENVAT credit. The impugned order was set aside, and the appeal was allowed with consequential relief, if any, as per law.

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Issues:
- Entitlement to credit of duty paid by input supplier
- Whether the process carried out by the input supplier amounts to 'manufacture'

Analysis:
1. The appeal was filed against an order-in-appeal passed by the Commissioner (Appeals), Central Excise-Vadodara. The appellant, engaged in the manufacture of Litharge, purchased Pig Lead Ingots from various suppliers, including M/s Gravita Metal, Jammu, and availed credit of the duty paid by them. A notice was issued to M/s Gravita Metal, alleging that their processes did not result in manufacture, leading to a demand for recovery of the credit availed by the appellant. The Ld. Commissioner (Appeals) rejected the appellant's appeal, prompting the present appeal.

2. The key issue in the appeal was whether the appellant was entitled to credit of duty paid by M/s Gravita Metal on the Pig Lead Ingots. The jurisdictional Commissioner held that the processes by M/s Gravita Metal did not amount to 'manufacture,' directing the appellant to reverse the credit. The appellant argued that the duty paid irregularity by the input supplier should not be a ground for denying credit, citing a judgment of the Hon’ble Gujarat High Court in a similar case.

3. The Tribunal referred to the judgment of the Hon’ble Gujarat High Court in the case of Nahar Granites, where it was held that a manufacturer could avail CENVAT credit on inputs used for manufacturing a final product, even if the duty paid by the original manufacturer was later found to be not leviable. The Tribunal emphasized that if the department accepted the declarations and duties without dispute, the credit on such duty should not be denied to the purchaser fulfilling all conditions for availing CENVAT credit.

4. The Tribunal further cited judgments from the Hon’ble Bombay High Court and Hon’ble Karnataka High Court, supporting the principle that the duty paid by the supplier should not be contested or challenged by the recipient unit if all conditions for availing credit are met. Applying these principles to the present case, the Tribunal set aside the impugned order and allowed the appeal with consequential relief, if any, as per law.

5. In conclusion, the Tribunal held that the appellant was entitled to the credit of duty paid by M/s Gravita Metal on the Pig Lead Ingots, following the legal precedents and principles established by higher courts in similar cases. The judgment was pronounced in open court on 25.05.2018.

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