Cenvat Credit Availment in Service Tax and ExciseDuty assessed at the supplier unit, cannot be challenged by the officers of recipient unit

Issue

The assessees other unit sent them the inputs as such, on payment of duty under transaction value. The respondent availed credit on the inputs accompanied with the Central Excise invoices. The adjudicating authority observed that the supplier of the inputs should have paid duty on the amount, they initially availed the credit

Pleaded

Shri Anand Mishra, Advocate appeared for respondent and contested that Duty assessed at the supplier unit, cannot be challenged by the officers of recipient unit.The appeal of the department was rejected by following the ratio of Honourable Apex court in the matter of Commissioner of Central Excise & Customs vs. MDS Switchgear Limited  2008 (229) ELT 485 (S.C.) .

CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL,West Zonal Bench, Ahmedabad

Appeal No. : E/1418,1419/2008

(Arising out of OIA-KKS/326-328/DAMAN/2008 dated 25.08.2008, Passed by Commissioner (Appeals) Central Excise, & S.T., Daman )

Commissioner of Central Excise & S.T., Daman : Appellant (s)

VERSUS

1. M/s. Jeson Industries Limited : Respondent (s)
2. Shri Diresh Shashikant Gosalia

Represented by :

For Revenue (s) : Shri Alok Srivastava, Authorised Representative
For Respondent (s) : Shri Anand Mishra, Advocate

For approval and signature :

CORAM :

Mr. P.K. Das, Honble Member (Judicial)

Date of Hearing / Decision : 24.04.2015

ORDER No. A/10388-10389/2015 Dated 24.04.2015

Per : Mr. P.K. Das;

Revenue filed these appeals against the impugned orders passed by the Commissioner (Appeals).

2. The relevant facts of the case in brief, are that respondents are engaged in the manufacture of Acrylic Polymers and Vinyl Polymers classifiable under Chapter 39 of the Schedule to the Central Excise Tariff Act, 1985. The assessees other unit sent them the inputs as such, on payment of duty under transaction value. The respondent availed credit on the inputs accompanied with the Central Excise invoices. The adjudicating authority observed that the supplier of the inputs should have paid duty on the amount, they initially availed the credit. So, the adjudicating authority confirmed the demand of Rs. 8,63,938/- alongwith interest and imposed penalty of equal amount of duty on Respondent No.1 and also imposed penalty of Rs. Two lakh on Shri Dhiresh Shashikant Gosalia, Managing Director of the Respondent No.1 (herein Respondent No.2). Commissioner (Appeals) allowed the appeals filed by the Respondent.

3. Learned Authorised Representative for the Revenue reiterates the ground of appeal. He submits that the CENVAT credit should be restricted to the amount, the credit availed by the supplier at the initial stage. On the other hand, learned Advocate for the respondents relied upon the decision of the Hon’ble Supreme Court in the case of Commissioner of Central Excise & Customs vs. MDS Switchgear Limited  2008 (229) ELT 485 (S.C.).

4. I find that the Hon’ble Supreme Court in the case of MDS Switchgear Limited (supra) held that the Respondent manufacturer, to avail the benefit of CENVAT credit paid by the supplier manufacturer is to the quantum of duty already determined by the jurisdictional Revenue officers of the supplier unit, cannot be contested or challenged by the officers in charge of recipient unit. In view of that, I do not find any reason to interfere the order of the Commissioner (Appeals). Accordingly, both the appeals filed by the Revenue are rejected.
(Order dictated and pronounced in the Court)

(P.K. Das)
Member (Judicial)