M/S. Rajshree Industries vs C.C.E. Delhi-Iv

[Arising out of Order-In-Appeal No. 250/CE/APPL/DLH-IV/2014 dated: 26.09.2014 passed by Commissioner (Appeals) Delhi-IV]

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. Rajshree Industries ...Appellant

Vs.

C.C.E. Delhi-IV Respondent

Appearance:

Mr. N L Jangir, Advocate for the Appellants

Mrs. Kanu Verma Kumar, AR for the Respondent

CORAM:

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

Date of Hearing.14.10.2015

FINAL ORDER NO. 54197 /2015

Per S. K. Mohanty (for the Bench):

The brief facts of the case are that the appellant is engaged in the manufacture of motor vehicle parts falling under chapter 87 of the Central Excise Tariff Act, 1985. The appellant avails cenvat credit on inputs and capital goods used in or in relation to manufacture of the said final product. During the disputed period, the appellant has taken cenvat credit on bright bar as input, which was denied by the Central Excise authorities on the ground that the process of generation of bright bars does not coming out any manufacturing activity as per Section 2(f) of the Central Excise Act, 1944, and thus, the said disputed goods cannot be considered as input for the appellant for taking of cenvat credit.

2. Sh. N. L. Jangir, the Ld. Advocate appearing for the appellant submits that since, the duty has been paid at the suppliers end and the said duty has been retained and collected by the Jurisdictional Central Excise authorities, the duty benefit to the recipient appellant cannot be denied, since the same depicts the very purpose of cenvat scheme. To justify his stand the Ld. Advocate relies 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, Ms. Kanu Verma Kumar, the Ld. AR appearing for the respondent submits that since bright bar is an excisable commodity being not arising out of any manufacturing process, the Central Excise duty paid on those goods shall not be eligible for the cenvat benefit. In this context, she referred to provisions of Section 5A of the Central Excise Act, 1944, to justify her stand that when no duty is payable, taking of duty inadvertently paid is not eligible for the cenvat benefit.

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

5. Rule 3 of the Cenvat Credit Rules is the enabling provision which entitles a manufacturer to take credit on various duties paid on the inputs and capital goods received in the factory. Since the supplier of bright bar are duly registered with the Central Excise Department and discharged appropriate duty liability on the said goods, in my opinion, cenvat benefit cannot be denied to the recipient manufacturer, which in the present case is the appellant. The case in hand is squarely covered by the judgment of Honble Supreme Court in the case of MDS Switchgear (supra), wherein while allowing the appeal in favour of the appellant, the Honble Court has held that quantum of duty already determined by jurisdictional officers of suppliers unit cannot be contested or challenged by officers in charge of the recipient unit. Placing reliance on Section 5A of the Central Excise Act by the Ld. AR is distinguishable from the facts of the present case inasmuch as the said statutory provisions deals with power to grant exemption from the duty of excise and is no way concerned with the provisions governing the cenvat statute, entitling a manufacturer to avail the cenvat credit on the disputed goods.

6. In view of the settled position of law, I am of the opinion that the impugned order cannot sustain and, therefore, the same is set aside and the appeal is allowed in favor of the appellant.

(Dictated and pronounced in open court)

(S.K. Mohanty)

Member(Judicial)

Neha

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