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M/s. Aman Medical Products (P) Limited Versus Commissioner of Central Excise & S.T., Daman

2015 (10) TMI 769 - CESTAT AHMEDABAD

Cenvat credit - eligible credit - supplier paid the amount on exempted goods as reversal of credit and shown the same on Invoice as duty of excise - Invocation of extended period of limitation - Held that:- Input supplier paid the amount under Rule 6(3) of the said Rules, but, they have shown in the invoices as Central Excise duty. According to the learned Advocate, the input supplier shown amount in the invoices as Central Excise duty, therefore, it can not be treated an amount under Rule 6(3). .....

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lier have not paid Central Excise duty and wrongly declared the Central Excise duty in their invoices. This fact, is coming out from the verification report of the jurisdictional Assistant Commissioner, as mentioned in the impugned order. Thus, it is clear hit by Rule 3 of Cenvat Credit Rules, 2004.

Regarding the demand is barred by limitation, it is seen that the appellant was earlier engaged in the manufacture of parts of syringes and were clearing the same without payment of duty .....

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presentative ORDER Per : Mr. P.K. Das; The relevant facts of the case, in brief, are that the appellants were engaged in the manufacture of Syringe classifiable under sub-heading No. 90183100 of the schedule to the Central Excise Tariff Act, 1985. They received parts and accessories of Syringe for manufacturing Syringe and availed CENVAT credit under Cenvat Credit Rules, 2004. A show cause notice dated 25.09.2008 was issued proposing demand of CENVAT credit of ₹ 19,68,918/- alongwith inter .....

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supplier has erroneously paid the duty and therefore, the appellant is not eligible to avail CENVAT credit. There is denial of CENVAT credit of ₹ 5,64,435/- on the ground that the supplier paid the amount on exempted goods i.e. parts and accessories under Rule 6(3) of the Cenvat Credit Rules, 2004. It is stated that Rule 3 of the Rules 2004 permitted to avail credit on the duty and not the amount. The adjudicating authority confirmed the demand of duty alongwith interest and imposed penalt .....

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ELT 705 (Tri. Bang.) (c) CCE, Chennai vs. CEGAT, Chennai - 2006 (202) ELT 753 (Mad.) (d) Balakrishna Industries Limited vs. CCE, Jaipur - 2014 (309) ELT 354 (Tri. Del.) (e) Oleofine Organics (India) Pvt. Limited vs. CCE, Thane-1 - 2014 (299) ELT 91 (Tri. Mumbai) (f) Shakun Polymers Limited vs. CCE, Daman - 2009 (241) ELT 250 (Tri. Ahmd.) (g) V.G. Steel Industry vs. CCE - 2012 (27) STR 94 (P&H) 3. He further submits that denial of CENVAT credit of ₹ 5,64,435/- cannot be sustained on mer .....

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he Revenue submits that the parts and accessories are nil rate of duty by Notification No. 6/2002-CE (supra) so, the input supplier is not entitled to pay duty and the duty paid by them would not amount to Central Excise duty. He drew attention of the Bench to Rule 3 of the Rules 2004 to substantiate his contention that CENVAT credit would be eligible on the duty. Regarding the demand of ₹ 5,64,435/-, he submits that the appellants, prior to this period were manufacturing the parts and acc .....

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edit on the basis of invoices issued by the supplier. It is consistently viewed by the Hon ble High Court and the Tribunal that the jurisdictional officers of recipient of inputs have no authority for assessment of the duty paid by the input supplier. In the case of Commissioner vs. Purity Flexpack Limited (supra), it was a question before the Hon ble High Court as to whether or not the assessee is entitled for cenvat credit at the higher rate paid on inputs, for which manufacturer of inputs had .....

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ot to be allowed on such quantity of input or input services used in the manufacture of exempted goods. Rule 6 (3) of the said Rules provides that if the manufacturer of goods has not opted not to maintain separate accounts and follow the procedure as prescribed therein, the manufacturer of goods shall pay an amount of 5%/ 6%/ 10% of the value of exempted goods. Rule 3 of the Cenvat Credit Rules, provides that a manufacturer shall be allowed to take credit of the duty of excise and other duty as .....

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the invoices as Central Excise duty, therefore, it can not be treated an amount under Rule 6(3). Learned Advocate also contested the demand of the said amount as barred by limitation. I am unable to accept the contention of the learned Advocate on merit as well as on limitation. The mere mentioning of Central Excise duty wrongly in the invoice by the input supplier, appellant is not entitled to take CENVAT credit. For proper appreciation of the case, the relevant portion of the findings of the C .....

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they were themselves manufacturing parts of syringes and clearing the same without payment of duty whereas the department has demanded reversal of credit at the rate 10% of the value of the parts under Rule 6(3) of the Cenvat Credit Rules 2004 (which requires that if an assessee manufactures both dutiable and exempted goods using common inputs and does not maintain separate records, it can take full credit of duty paid on inputs but will have to pay 10% on the value of the exempted goods at the .....

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pt and, therefore, the amount shown as payment of excise duty towards 8% or 10% was actually payment of amount under Rule 6(3) of the Cenvat Credit Rules, 2004. Further, there was never any effective rate of duty at 10% adv on these parts and, therefore, in respect of invoices received form suppliers showing payment of central excise duty as 10%, the appellants should have clearly understood that it was not payment of central excise duty but payment of an amount on which no cenvat credit was a .....

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