TaxTMI 
TaxTMI 
2024 (2) TMI 193
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....SD and GK SIL POWER 45N CMB etc., in a Combi-pack, consisting of EMD, manufactured in their unit and Mosquito Repellent Refills supplied by M/s.GCPL, on payment of duty by adopting value under Section 4 or Section 4A of the Central Excise Act, 1944 as may be applicable to a particular case. There is no dispute on the valuation adopted by appellant. 1.2 The appellant availed cenvat credit on inputs used in the manufacture of their final product viz., EMD and also on Mosquito Repellent Refills, received from units of M/s.GCPL, situated at Puducherry and Guwahati. In the case of Mosquito Repellent Refills received from M/s.GCPL, duty had been paid on the value adopted by M/s.GCPL under Section 4A of Central Excise Act, 1944. 1.3 It was noticed that the units of M/s.GCPL at Guwahati had availed erroneous and excess refund by wrongly availing North East exemption Notification No.20/2007-CE, by paying excess duty through the mode of adopting higher value determined under Section 4A of the said Act in respect of the Mosquito Repellent Refills cleared by them on stock transfer to their own unit in Puducherry which were ultimately delivered to the job worker. According to department, M/s.....
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....e manufacture of other excisable goods, the MRP based assessment would not apply. At the receiving end, the job-worker i.e. the appellant has taken excess credit as a result of the said modus operandi. 1.6 It appeared to department that the appellant had wrongly taken CENVAT credit in respect of inputs by reason of suppression of facts and also contravened the provisions of Rule 3 & 9 of the Cenvat Credit Rules, 2004 with intent to avail ineligible Cenvat credit and hence were liable to penalty in terms of the provisions of Rule 15(2) of the CENVAT Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. 2. It appeared that the appellant has availed excess cenvat credit on the invoices issued by M/s.Godrej Consumer Products Limited (GCPL), Kalapahar, Guwahati and M/s.Godrej Consumer Products Limited, Lokhra, Guwahati, which is ineligible. Show Cause Notice dated 06.11.2013 was issued to the appellant proposing to recover the wrongly availed cenvat credit along with interest for the period from October 2008 to December 2012, and imposing penalties. After due process of law, the Original authority confirmed the demand along with interest and for imposed penalties.....
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.... Guwahati, Assam availed the Area Based Exemption under Notification No.20/2007-C.E. dated 25.04.2007 as amended by Notification No.20/2008 dated 27.03.2008 w.e.f 01.04.2008. In terms of the Notification, exemption is given on duty payable on value addition which was fixed at 34% of the duty payable for goods manufactured under Chapter 38 of the Central Excise Tariff Act, 1985. The refill bottles were cleared by GCPL under the above Notifications on payment of excise duty on value determined under Section 4A of the Central Excise Act, 1944. The refill bottles were sold as such and were also supplied to the appellant for manufacture of Combination packs. The MRP of the refill bottle is the same as that of the refill bottles sold to the ultimate consumers. 3.7 Proceedings were initiated against GCPL, Kalapahar and GCPL, Lokhra by Commissioner of Central Excise, Guwahati vide Show Cause Notice dated 03.04.2013, which culminated in Order in Original No.03/2013-14 dated 18.12.2013. The demand was confirmed on the GCPL Guwahati units on the ground that the refill bottles are assessable to Excise duty based on value determined under Rule 8 of the Central Excise Valuation Rules, 2000 (110....
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....PL, Lokhra. It is not in dispute that duty is paid on the Mosquito Repellent Refills. Then credit ought not to be denied to the Appellant irrespective of the proceedings initiated against GCPL, Kalapahar and GCPL, Lokhra. In this regard, the Appellant placed reliance on the following decisions:- (i) Commissioner of Central Excise, Chennai-l v. CEGAT, Chennai -2005 (1) TMI 125 High Court of Judicature at Madras: (ii) The Madras Aluminum Co. Lid., Guwahati v. Commissioner of Central Excise, Salem 2015 (5) TMI 97-CESTAT Chennai, (iii) Balakrishna Industries Ltd. v. Commissioner of C. Ex., Jaipur-I-2014 (309) E.L.T. 354 (Tri.-Del.) The Appellant also placed reliance on Circular No. 877/15/2008-CX dated 17.11.2008 issued by the Board wherein it has been clarified that Rule 3 of the CCR allows credit of 'duty paid' by the manufacturer and not 'duty payable'. In light of the above, it is submitted that the Appellant is entitled to avail credit of duty paid and the Impugned Order merits to be set aside on this ground alone. 3.13 Without prejudice, the disallowance of credit, if at all correct, can only be to the extent of Rs.2,76,53,587/-being the amount held as err....
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....aid duty on the inputs procured by them and used in the manufacture of final product. 7. Rule 3 of the Cenvat Credit Rules, 2004 provides that a manufacturer should be allowed to avail Cenvat Credit of the duty paid on inputs used in the manufacture of dutiable final product. Thus, the appellant has availed Cenvat Credit of the duty paid on inputs used in the manufacture of dutiable final product. There is no dispute that the duty has been collected from the appellant and deposited with the Government. The allegation is that the manufacturer of Mosquito Repellent Refills, i.e. the units of GCPL at Guwahati, had wrongly availed North East exemption Notification No.20/2007-CE, by paying excess duty through the mode of adopting higher value as determined under Section 4A of Central Excise Act, 1994 instead of adopting the value as under Section 4 of Central Excise Act, 1994 r/w Rule 8 of CVR 2008. 8. As per Notification No.20/2007 dated 25.04.2007, the manufacturer of Mosquito Repellent Refills has to discharge all duties on final products and then claim refund. The notification grants exemption by way of refund. The units of GCPL, Guwahati have paid duty adopting transaction value ....
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....aid by manufacturer is refunded, the Cenvat credit availed of duty paid on inputs and capital goods would be eligible. In our view, the appellant has rightly availed the Cenvat credit of the duty collected from them by the manufacturer who has availed area based exemption notification. The appellant does not have any say or control as to the method of valuation adopted by the manufacturer, who supplied the inputs to the appellant. Cenvat credit cannot be denied at the recipient's end, without any legal basis. 10. The High Court of Madras, in the case of Commissioner of Central Excise, Chennai - 2005 (1) TMI 125 High Court of Judicature at Madras, had occasion to analyse a similar situation wherein, the supplier of goods was unaware of an exemption notification and paid the duty on the final product which was passed on to the assesse. The department was of the view that as the supplier is eligible for exemption, the assesse is not eligible for credit. The High Court of Madras held that if the duty has been paid on the inputs, Cenvat credit cannot be denied. The relevant para reads as under:- "4. A perusal of Section 57A(1) shows that the terminology used therein is 'paid' and not....