M/S. Caparo Engineering India Ltd vs C.C.E. & S.T., Indore

[Arising out of Order-In-Appeal No. IND/CEX/000/APP/222/12 dated: 08.08.2012 passed by CCE Indore]

For approval and signature:

Hon'ble 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. Caparo Engineering India Ltd. ...Appellant

Vs.

C.C.E. & S.T., Indore Respondent

Appearance:

Mr. Manish Saharan, (Advocate) for the Respondent

Mr. G R Singh, DR for the Appellants

CORAM:

Hon'ble Mr. S.K. Mohanty, Member (Judicial)

Date of Hearing. 09.07.2015

Final Order No. 54128 /2015_

Per S K Mohanty:

The brief facts of the case that the appellant is engaged in the manufacture of sheet metal parts falling under Chapter 72, 76 and 82 of the Central Excise Tariff Act, 1985. The appellant avails cenvat credit in respect of Central Excise duty and service tax paid on the capital goods and input services used in or in relation to manufacture of the said final products. In the present case, taking of cenvat credit based on the invoices issued by M/s SKM Steels Ltd., Indore was denied by the Department to the appellant on the ground that the Central Excise duty paid by the said supplier was not required to be paid in view of the exemption claimed from payment of central excise duty. According to the Department, since the supplier was not liable to pay the Central Excise duty and has paid the same, the recipient of the goods i.e. the appellant is not eligible for cenvat benefit.

2. The Ld. Advocate Sh. Manish Saharan appearing for the appellant submits that classification of the excisable goods is the responsibility of the Jurisdictional Central Excise Authorities at the suppliers end. Taking of cenvat credit based on the invoices issued by the suppliers and without disputing that the duty/ service tax liability has not been discharged at the suppliers end, the cenvat credit cannot be denied to the appellant in view of any specific restrictions contained in the Cenvat Credit Rules, 2004. According the Ld. Advocate, the duty/ tax paid character of the disputed goods, their receipt and utilization by the appellant are not in dispute, cenvat credit in available to the appellant. To substantiate his above stand, the Ld. Advocate has relied on the judgment of Honble Supreme Court in the case of CCE & CC vs MDS Switchgear Ltd. reported in 2008 (229) ELT 485 (S.C.).

3. Per contra, the Ld. DR Sh. G R Singh appearing for the respondent reiterates the findings recorded in the impugned order.

4. Heard the Ld. Counsel for both the sides and perused the records.

5. Taking of cenvat credit of Central Excise duty and service tax paid by the supplier, is in conformity with Rule 3(1) of the Cenvat Credit Rules, 2004. The fact is not under dispute that the goods covered under the disputed invoices have not been received by the appellant for use in the intended purpose. Further, it has also not been alleged by the authorities below that the Central Excise duty/ service tax liability has not been discharged by the suppliers of disputed goods/ services. Thus, in absence of any specific prohibition in the Cenvat Statute, restricting availment of cenvat credit, in the eventuality, of any dispute between Central Excise Department and the supplier, the recipient of the goods, cannot be held liable for reversal of cenvat credit. I find that the issue involved in this case has been dealt with by the Honble Supreme Court in the case of MDS Switchgear (supra), wherein it has been held that quantum of duty already determined by the jurisdictional officers of the supplier unit cannot be contested or challenged by the officers incharge of recipient unit.

6. In view of the settled position of law, I do not find any merits in the impugned order, and thus, the same is set aside and the appeal is allowed in favour of the appellant.

(Dictated and pronounced in open court)

(S. K. Mohanty) Member(Judicial)

Neha

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