2017 (12) TMI 1223

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....ision which is a 100% EOU and (ii) Foundry Division which is a DTA unit. The dispute is for the period March, 2013 to December, 2014 during which the machining division (100% EOU) cleared certain imported raw materials i.e. aluminium ingots, which were procured without payment of duty under Notification No. 52/2003-Cus. dated 31.03.2003 to their sister concern, Foundry division. At the time of such clearance the machining division paid the Basic Custom Duty (BCD) and the cesses in cash but utilised the cenvat credit to pay CVD and SAD. Further, upon receipt of material in the foundry division, cenvat credit was availed of the entire duty paid by the machining division. The Department carried out investigation against both the units and afte....

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....R-6 challan. It is submitted that since such payment was made even prior to issue of show cause notice, there was no justification to impose penalty by the adjudicating authority. (ii) The Foundry Division had correctly taken cenvat credit of duty paid on the inputs received in their factory since it was covered by invoice evidencing payment of duty. It has further been submitted that the duty paid by the Machining Division is nothing but Central Excise duty and hence the Foundry Division will be eligible to such credit. (iii) They have also relied on the following case laws and claimed that these case laws decide the issue in their favour. (i) CCE&C, Visakhapatnam Vs. Matrix Lab. Ltd. - 2012 (281) ELT 569 (Tri Bang.) (ii) CCE, Fa....

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....y of goods cleared from the 100% EOU can be considered as excise duty only in respect of goods which were manufactured by such unit. In the present case, the Machining Division has wrongly paid the CVD as well as SAD by making use of cenvat credit. In terms of Rule 3(4) of the Cenvat Credit Rules, 2004, Cenvat Credit cannot be utilised for payment of such customs duties. Consequently, we find no infirmity in the view taken by the adjudicating authority that such duty payment is required to be made only through cash and not allowed to be done by making use of cenvat credit. In this regard, we have also perused the case law of M/s Matrix Laboratories Ltd. (supra) which has been cited by the appellant but we find that the facts and circumstanc....