TMI Blog2019 (12) TMI 525X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 of the said Credit Rules. Further, as per Rule 3(6) of the Credit Rules, the amount paid under aforesaid Rule 3(5) shall be eligible as CENVAT credit as if it was a duty paid by the person who removed such goods - Therefore, in view of the specific provisions contained in Rule 3(5) and 3(6) aforesaid, the appellant company receiving input from the supplier who has removed the said goods as such (being bought out goods) is legally entitled to credit even if the said goods have not been manufactured by the supplier. Thus, the appellant is legally entitled to avail credit on inputs which though not manufactured by the supplier, has been removed by the supplier on the strength of duty paid excise invoice particularly in the fact of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral excise duty is being paid. The appellant procured parts of induction furnace on payment of central excise duty on which credit was availed. This has been disputed by the department. It is the case of the department that the goods on which credit has been availed, was supplied by one, M/s. Inductotherm (I) Pvt Ltd, Ahmedabad ( supplier ), which was cleared as such at a value higher than the value at which the said goods were procured by the supplier. It was also contended that the said goods were not manufactured by the supplier but were cleared as such . Show Cause Notice dated 25.05.2016 was issued and the duty demand was confirmed vide Order-in-Original dated 24.03.2017, which has further been upheld by the Ld. Commissioner (Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee clearing the goods as such could not change the value while clearing the bought out goods, even though the assessee has paid the duty by way of debiting the CENVAT credit account and therefore, the assessee is required to deposit the said duty amount under Section 11D of the Central Excise Act. He submitted that since the amount that has been paid for the goods is not a duty, the appellant cannot avail CENVAT credit. On the said premise, the Ld. DR prayed that the appeal filed by the assessee be rejected being devoid of merit. 6. Heard both sides and perused the appeal records. 7. In the instant case, I find that credit has been denied for the reason that the subject goods on which credit has been availed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt as duty higher that the amount payable, I am of the view that the issue is no longer res- integra inasmuch it is now settled legal position that credit cannot be denied to the recipient when duty amount was legally not payable or that duty was paid at a higher rate or value. The Hon ble Punjab and Haryana High Court in the case of CCE, Chandigarh vs. Ranbaxy Labs Ltd 2006 (203) ELT 213 (P H) held that even if duty was legally not payable, credit cannot be denied to the recipient of goods when admittedly duty has been collected by the Revenue. The relevant portion of the decision is extracted below: 3. Brief facts of the case are that the assessee sent certain goods for job work. As per notification, the job worker was ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the duty paid on the inputs purchased is well settled. In the absence of the inputs being subjected to duty payment question of availing modvat credit by the manufacturer procuring such inputs does not arise, once the authorities had held that the supplier of the inputs was not subjected to the duty payment, question of appellants seeking to avail modvat credit in respect of inputs so supplied by the supplier cannot arise. 5. In case the supplier had paid the duty wrongly or by mistake, that would only entitle the supplier to seek refund of such amount. But that by itself cannot create any right in favour of the appellants who had procured such duty free inputs. The contentions canvassed as above, on behalf of the respon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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