Tribunal allows Cenvat credit on excise duty for capital goods, rejects late Show Cause Notice.

The tribunal held that the respondent is entitled to Cenvat credit on excise duty paid on capital goods as the duty payment was accepted without objection. The Show Cause Notice issued beyond the limitation period was deemed unsustainable. The tribunal upheld the Learned Commissioner (Appeals) order, dismissing the revenue's appeal and disposing of the respondent's cross-objection.

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Issues Involved:
1. Entitlement of Cenvat credit on excise duty paid on capital goods.
2. Legitimacy of duty payment under self-assessment.
3. Applicability of limitation period for issuing the Show Cause Notice.

Summary:

Entitlement of Cenvat Credit on Excise Duty Paid on Capital Goods:
The primary issue is whether the respondent is entitled to Cenvat credit for excise duty paid on 'Engraved Ms Copper Plated Rollers' despite the capital goods being exempted from excise duty under Notification No. 49/2006-CE dated 30.12.2006. The department argued that since the capital goods were exempted, any duty paid cannot be treated as excise duty under Section 3 of the Central Excise Act, 1944, thereby disqualifying the respondent from claiming Cenvat credit.

Legitimacy of Duty Payment Under Self-Assessment:
The respondent contended that the duty was paid under a self-assessment procedure, which was not objected to by the department, thus attaining finality. They argued that once the duty payment is accepted by the department without objection, it cannot later be contested at the recipient's end for Cenvat credit purposes. The tribunal agreed, stating that the self-assessment of excise duty payment by the supplier was accepted by the department, and no objection was raised, making the duty paid under Section 3 of the Central Excise Act, 1944, valid for Cenvat credit.

Applicability of Limitation Period for Issuing the Show Cause Notice:
The respondent also argued that the Show Cause Notice issued on 09.05.2013 for the period of October 2008 to July 2012 was beyond the one-year limitation period and thus not sustainable. The tribunal noted that there was no suppression of facts by the respondent, and therefore, the extended period for issuing the notice was not applicable.

Tribunal's Decision:
The tribunal found that the supplier's payment of excise duty was accepted without objection, making it valid for Cenvat credit. The tribunal cited several judgments supporting this view, including MDS Switchgear Ltd. and Creative Enterprises, which established that unless the assessment at the supplier's end is challenged, Cenvat credit at the recipient's end cannot be disputed. The tribunal upheld the order of the Learned Commissioner (Appeals), allowing the Cenvat credit on capital goods to the respondent. The revenue's appeal was dismissed, and the cross-objection filed by the respondent was disposed of.

Conclusion:
The tribunal concluded that the respondent is entitled to Cenvat credit on the excise duty paid on the capital goods, as the duty payment was accepted by the department without objection. The Show Cause Notice was also found to be issued beyond the permissible period, rendering the demand for Cenvat credit unsustainable. The order of the Learned Commissioner (Appeals) was upheld, and the revenue's appeal was dismissed.

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