Cenvat credit cannot be denied on the ground that the supplier is not a manufacturer

Once the recipient has received the excisable goods on payment of duty, Cenvat credit cannot be denied on the ground that the supplier is not a manufacturer

Cummins Diesel Sales & Services India Limited (the Appellant) is a manufacturer of the dutiable final products. In this respect, the Appellant had procured certain goods from Amul Industries Pvt. Ltd. (Amul) on payment of duty and availed the Cenvat credit on the same.

The learned lower Appellate Authority vide his Order denied Cenvat Credit of Rs. 13,95,414/- to the Appellant and also ordered to recover the same along with interest on the ground that the supplier of the goods namely, Amul is not a manufacturer. Therefore, the duty paid by the supplier is only a deposit and not the duty.

Being aggrieved,the Appellant preferred an appeal before the Hon’ble CESTAT, Mumbai. The Appellant relied upon following case laws:

• Hylite Cables [2007 (212) ELT 284 (Tri-Ahmd)],
• Synmedic Laboratories [2013 (294) ELT 147 (Tri-Del)],
• Hindustan Lever Ltd. [2007 (211) ELT 295 (Tri-Ahmd)],
• Indian Oil Corporation Ltd. [2006 (206) ELT 533 (tri-Bang)] and
• Cipla Ltd. [2011 (273) ELT 391 (Tri-Mum)]

and argued that once the recipient has received the goods on payment of duty, Cenvat credit cannot be denied on the ground that the supplier of the goods was not required to pay Excise duty on the goods supplied.

The Hon’ble CESTAT, Mumbai set aside the impugned order of the lower Authorities and held that the Appellant had procured an excisable product on payment of Excise duty and once the supplier of the goods had discharged his duty liability, Cenvat credit on the same could not be denied to the recipients of the goods.