M/S.Ambey Laboratories vs Cce, Delhi-I

[Arising out of Order-in-Appeal No.84/CE/DLH/2013 dated 25.07.2013 passed by the Commissioner (Appeals), New Delhi].

For approval and signature:

HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

M/s.Ambey Laboratories Appellant

Vs.

CCE, Delhi-I  Respondent

Present for the Appellant : Shri Ashwani Sharma, Advocate

Present for the Respondent: Shri R.K. Mishra, D.R.

Coram: HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)

Date of Hearing/Decision: 30.07.2015

FINAL ORDER NO. 54145/2015

PER: S.K. MOHANTY

This appeal is directed against the impugned order dated 25.07.2013 passed by the Commissioner (Appeals), Central Excise, New Delhi, upholding disallowance of cenvat credit in the adjudication order.

2. Shri Ashwini Sharma, the ld. Advocate appearing for the appellant submits that the disputed goods are inputs for the appellant, which are used in or in relation to manufacture of final products. The Central Excise Duty paid by the supplier manufacturer on such inputs has been taken as cenvat credit by the appellant. He further submits that under the cenvat statute, two conditions have to be satisfied by the assessee for taking the credit viz., the duty should have been paid on the input goods received in the factory for use in or in relation to manufacture of final product and that the input is received under the cover of proper and valid duty paid documents. Thus, according to the ld. Advocate, since the said conditions have fulfilled, cenvat credit cannot be denied to the appellant. To substantiate his stand that denial of cenvat credit under the circumstances of the case is not proper and justified, the Advocate has relied on the following judgments/decisions of the judicial forum:-

1. KCP Ltd. vs. CCE, Chennai [2013 (295) ELT 353 (SC)]

2. UOI vs. Bharat Aluminium Co. Ltd. [2011 (263) ELT 48 (Chattisgarh)

3. CCE, Rohtak vs. J.B. Fashions Limited [2010 (262) ELT 122 (P&H)

4. CCE, Rajkot vs. Advance Diesels Engines Pvt. Ltd. [2012 (278) ELT 491 (Tri. Ahmd.)]

5. CCE, Hyderabad-III vs. Deepthi Formulation Pvt. Ltd. [2012 (286) ELT 396 (Tri. Bang.)]

6. Cummins Diesel Sales & Service India Ltd. vs. CCE, Pune-III [2015 (315) ELT 63 (Tri.-Mumbai)]

7. Maarkwell Paper Plast Pvt. Ltd. vs. CCE, Noida [2012 (285) ELT 76 (Tri.- Del.)]

8. CCE vs. Textile Corpn. Marathwada Ltd. [2008 (231) ELT 195 (SC)].

3. Percontra, Shri R.K. Mishra, ld. D.R. appearing for the respondent reiterates the findings recorded in the impugned order.

4. I have heard the ld. Counsel for both sides and perused the records.

5. Rule 3 of the Cenvat Credit Rules, 2004 is the enabling provision, which entitles the manufacturer to take cenvat credit of various duties and taxes paid on the inputs, capital goods and input services received in the factory of manufacture of final products. The only condition to be fulfilled for taking cenvat credit is that the central excise duty has been suffered on the input and that the input has been received in the factory for use in the intended purpose. No prohibitions have been contained in the said rules, providing for denial of cenvat credit, in the eventuality, where the jurisdictional Central Excise Authorities at the suppliers end have disputed the classification of the excisable goods. In the present case, since the central excise authorities at the suppliers end have accepted the payment of duty on the finished product (input for the appellant), there is no justification on the part of the Central Excise Authorities having jurisdiction over the factory of the appellant to deny the cenvat benefit. Further, the Central Excise Authorities having jurisdiction over the factory of the appellant have no locus standi to discuss about the classification of the goods, on which cenvat credit has been taken. It is the responsibility of the jurisdictional authorities at the suppliers end to decide the issue of classification. Since the central excise duty has been paid by the supplier manufacturer and that has been accepted by the jurisdictional central excise authorities, the classification or otherwise of the goods at the recipients end cannot be questioned, in view of the fact that there is no specific prohibition/ stipulations provided under the Cenvat Credit Rules for the said purpose. In this connection, I find that the judgments/decisions cited by the ld. Advocate for the appellant squarely applies to the facts of the present case. Considering the above, I am of the view that denial of cenvat benefit to the appellant is not legal and proper. Therefore, the impugned order is set aside and the appeal is allowed in favour of the appellant.

(Dictated and pronounced in the open Court)

(S.K. MOHANTY)

MEMBER (JUDICIAL)

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