Order Date – 20 October 2023

Parties: HUHTAMAKI PPL LTD and KANUBHAI PATELVs C.C.E. & S.T.-SILVASA

Facts – 

• The Appellant, HUHTAMAKI PPL LTD, had claimed cenvat credit on Gravure Printing Cylinders, duly duty paid and used the same in the manufacture of their final product.
• The adjudicating authority has denied the cenvat credit on the ground that such cylinders were not liable to duty, therefore, the supplier has wrongly paid the duty consequently, cenvat credit on such duty which was not payable is not available to the appellant.

Issue –

• Whether cenvat credit is available on Gravure Printing Cylinders?

Order –

• The Tribunal observed that as there is no evidence available on record that the payment of  duty by the supplier was questioned/ challenged / disputed by their  jurisdictional officer, in such case, the payment of duty is found to be legal  and correct and consequently, the appellant’s cenvat credit cannot be denied.
• There are many judgments passed on this issue, which is directly on the issue in hand. According to which, even though the payment of duty is disputed, unless and until, any action for challenging the assessment of the supplier is taken, Cenvat Credit at the recipient end cannot be disputed, on the ground that the supplier was not supposed to pay duty, may be for various reasons that either the goods is not amount to manufacture, or exempted etc.
• Even if Excise duty is not payable on the product for any reason but the assessee paid the excise duty and said payment of duty is not challenged or questioned at the manufacturers end, no question can be raised as regard availment of the credit by the recipient of the goods.
• Hence it was held that the cenvat credit cannot be denied merely on the ground that the supplier was not required to pay the duty. Therefore the impugned order is set aside and the appeal is allowed.