Case Law Details
C.C.E. & S.T.-Vapi Vs Kris Flexipacks Pvt Ltd (CESTAT Ahmedabad)
Introduction: The Central Excise and Service Tax Appellate Tribunal (CESTAT) Ahmedabad was presented with a case involving the eligibility of Cenvat credit for the recipient of goods when the excise duty on capital goods, namely ‘Engraved Ms Copper Plated Rollers,’ was paid under self-assessment by the supplier. The Department contended that since the capital goods were exempted from excise duty payment, the duty paid cannot be treated as excise duty. Consequently, the recipient should not be eligible for Cenvat credit.
Analysis: The key issue before the tribunal was whether the recipient of goods could avail Cenvat credit when the excise duty on capital goods was self-assessed and paid by the supplier, despite the goods being exempted from duty payment under an unconditional notification. The revenue argued that Cenvat credit is only available for excise duty paid as per Section 3 of the Central Excise Act, 1944, and since the duty was exempted, the supplier should not have paid it.
On the other hand, the respondent contended that the supplier had paid the duty under self-assessment, which was not objected to by the department, and thus, it attained finality. They relied on various judgments stating that once the duty payment is accepted, it cannot be considered not excise duty, and the recipient is entitled to claim Cenvat credit. The appellant also argued that their goods were not exempted, as the exemption was rescinded by a subsequent notification.
Conclusion: After considering the arguments, the CESTAT Ahmedabad ruled in favor of the respondent, upholding the decision of the Learned Commissioner (Appeals). The tribunal held that if the assessment of duty payment by the supplier has been accepted without objection, it cannot be disputed at the recipient’s end for availing Cenvat credit. The court also emphasized that if the department believed the supplier should not have paid the duty, they should have issued a show cause notice for recovery, which was not done. Therefore, the Cenvat credit on the capital goods was legally available to the recipient. This ruling highlights the importance of challenging supplier assessments to claim Cenvat credit appropriately.
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