Excise – Cestat Ahmedabad: Irrespective of the fact that whether at the supplier’s end duty is payable or otherwise, if the duty has been paid on the goods at the recipient end, for the purpose of availment of Cenvat credit, no question can be raised – Appeal allowed [Order attached]
Order Date – 27 April 2023
Parties: Aarti Industries Limited and Shri Omdev R Mishra Vs Commissioner of Central Excise & ST, Vapi
- The Appellant, Aarti Industries Limited and Shri Omdev R Mishra, were holding advance license which has been authorised to M/s. Reliance India Limited by invalidation of advance authorization in their favour, against the said invalidation, Reliance Industries Limited has supplied the inputs on payment of duty. The appellant has availed Cenvat credit of such duty.
- It was alleged that the above supplies are governed by Notification No. 44/2001-CE (NT) dated 26.06.2001 under which the supplier was not supposed to pay any excise duty and they were compulsorily to take exemption under the said notification therefore, the supplies made without availing exemption on payment of duty, on such duty Cenvat credit is not admissible to the appellant.
- Whether the appellants are entitled to Cenvat credit?
- The Tribunal observed that the Notification No. 44/2001-CE (NT) is indisputably a conditional one. In terms of Section 5A of Central Excise Act, 1944 it is not compulsion for the assessee to avail a conditional notification. Therefore, when the supplier has not availed exemption notification 44/2001-CE (NT) and cleared the goods on payment of duty, such payment of duty cannot be disputed. Consequently, appellant’s availment of Cenvat credit of such duty cannot be questioned.
- Moreover, irrespective of the fact that whether at the supplier’s end duty is payable or otherwise, if the duty has been paid on the goods at the recipient end, for the purpose of availment of Cenvat credit, no question can be raised. As per Cenvat Credit Rules, there is no bar for the input received by an assessee that such input is otherwise dutiable or not for availing Cenvat credit.
- In view of the judgment in Oleofine Organics (India) Pvt. Limited and in many other cases, it can be seen that on both the counts i.e. on the issue of availment of exemption Notification No. 44/2001-CE (NT) dated 26.06.2001 by the supplier and also where even if the duty is not payable by the supplier but the same was paid, Cenvat credit cannot be denied at the recipient end.
- The appeals are allowed.