CENVAT credit on duty actually paid by supplier upheld, with demand and interest on alleged excess credit set aside.

CENVAT credit was treated as admissible to the recipient on the duty actually paid on inputs received from a sister concern under invoices. The governing principle applied was that a recipient manufacturer may avail credit on the duty borne by the inputs, and the duty already determined and paid at the supplier's end cannot be reopened at the recipient's end. Credit was not to be reduced merely because the supplier might have paid lesser duty. On that basis, the demand and interest raised on the alleged excess credit were set aside, and the credit taken on actual duty paid was upheld.

---

---

Issues: Whether CENVAT credit was admissible to the recipient on the duty actually paid on inputs received from the sister concern, and whether the demand and interest confirmed on the alleged excess duty credit could be sustained.

Analysis: The inputs were received under invoices from the sister concern and credit was taken on the duty actually paid. The governing principle applied was that the recipient manufacturer is entitled to avail credit on the duty borne by the inputs, and the quantum of duty already determined at the supplier's end cannot be reopened at the recipient's end. The decision also followed the view that credit cannot be reduced merely because the supplier ought to have paid lesser duty, and the availment of credit on actual duty paid was treated as proper.

Conclusion: The credit was held admissible and the impugned order confirming demand and interest was set aside in favour of the assessee.

---