TMI Blog2023 (5) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... 4/2001-CE (NT) being a conditional one, it is optional for the assessee to either avail the said conditional notification or not. 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. The only condition attached to the Rules is that the input received by the assessee shall be duty paid. Therefore, for this reason also Cenvat credit at the appellant s end cannot be denied. On the issue that whether the payment of duty can be disputed while allowing Cenvat credit at the recipient end of the inputs, in the case of Pearl Polymers Limited [ 2016 (12) TMI 337 - CESTAT CHANDIGARH ], the Tribunal has held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . He further submits that once the duty was paid by the supplier irrespective to the fact that the same is payable or not, recipient of the inputs cannot be denied Cenvat credit. The assessment of duty at the supplier end cannot be questioned at the recipient end for allowing Cenvat credit. He placed reliance on the following judgments:- (a) Oleofine Organics (India) Pvt. Limited - 2014 (299) ELT 91 (Tri.- Mum) (b) Balakrishna Industries Limited - 2014 (309) ELT 354 (Tri.- Del.) (c) Shree Syam Filaments - 2014 (310) ELT 801 (Tri.-Del.) (d) Shakun Polymers Limited - 2009 (241) ELT 250 (Tri.- Ahmd.) (e) CCE vs. India Nestle - 2012 (275) ELT 49 (Bom.) (f) CCE vs. DCM Shriram Consolidated Pvt. Limited - 2017 (349) ELT 326 (Tri. Del.) (g) CCE vs. MDS Switchgear Limited - 2008 (229) ELT 485 (S.C.) (h) Pearl Polymers Limited - 2016 (342) ELT 600 (Tri.-Chan.) (i) Paramount Communication Limited - 2016 (337) ELT 283 (Tri. Del) (j) CC vs. Nucon Switch Gears Pvt. Limited - 2016 (331) ELT 593 (Tri.- Del.) (k) Neuland Laboratories Limited - 2015 (317) ELT 705 (Tri-Bang.) (l) CCE vs. GKW Limited -2014 (308) ELT 759 (Tri.- Mumbai) (m) CCE vs. Kitchen Applian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... From the plain reading of Section 5A, sub section (1A) it is clear that only compulsion on the assessee is to avail exemption which is absolute and the said compulsion is not applicable in respect of conditional notification. In the present case, Notification No. 44/2001-CE (NT) being a conditional one, it is optional for the assessee to either avail the said conditional notification or not. 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. The only condition attached to the Rules is that the input received by the assessee shall be duty paid. Therefore, for this reason also Cenvat credit at th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above , we allow both the appeals. The above decision of the Tribunal has been upheld by the Hon ble Bombay High Court which is reported as Commissioner vs. Oleofine Organics (India) Pvt. Limited 2015 (319) ELT A192 (Bom.) wherein the following observation was made by Hon ble High Court while dismissing the Revenue s appeal :- Cenvat credit not deniable on exempted goods if duty is paid against Advance Licence/Authorisation The Bombay High Court Bench comprising Hon ble Mr. Justice S.C. Dharmadhikari and Hon ble Mr. Justice A.K. Menon on 13-10-2014 dismissed the Central Excise Appeal No. 297 of 2013 with Central Excise Appeal No. 1 of 2014 filed by Commissioner of Central Excise Customs, Thane-1 against the CESTAT Final Order Nos. A/300-301/2013-WZB/C-II(EB), dated 10-4-2013 as reported in 2014 (299) E.L.T. 91 (Tri.-Mumbai) (Oleofine Organics (India) Pvt. Ltd. v. Commissioner). While dismissing the appeals, the High Court passed the following order : In both these appeals, the revenue is aggrieved by the fact that the Tribunal had allowed the assessee s appeal without satisfying itself as to whether the Notification and which was specifically pointed out h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ho in turn would have taken the benefit available to them. These have not been cancelled or withdrawn by the appellants. However, it is also observed from the impugned orders itself that the suppliers have not availed the refund of terminal excise duty. We also find from the documents submitted along with the appeal papers that the suppliers have in the relevant years paid very substantial duty from PLA and, therefore, the Revenue s contention regarding shifting of credit does not hold water. We have asked the ld. AR to show any specific provisions under Central Excise law requiring the appellants to clear the goods in the said situation under Notification No. 44/2001-C.E. (N.T.), dated 26-6-2001 only. We have also seen the Notification and the connected rules. These rules do not require the appellants to necessarily clear the goods duty free by following the procedure under Notification No. 44/2001-C.E. (N.T.), dated 26-6-2001. We also note that overall there is no loss to the Revenue as the credit is being taken of the duty paid. If the appellants could have followed the Notification No. 44/2001-C.E. (N.T.), dated 26-6-2001, no duty would have been paid by the suppliers and appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it of this duty by the recipient of goods. Similarly, the learned Commissioner of Central Excise, Belapur who dropped the demand in the case of M/s. I.G. Petrochemicals in an identical matter, also did not have the benefit of contents of the D.G.F.T. Policy Circular No. 16 (RE-2012/2009-14), dated 15th March, 2013. Therefore, in view of subsequent development both these orders cannot be applied to the instant case. 8 . As is seen from above, the Commissioner is not disputing the fact that the issue stands covered by the precedent decision of the Tribunal in the case of Oleofine Organics (India) Pvt. Ltd. v. CCE, Thane-I (supra), but has chosen not to follow the same by making a reference to the policy circular issued by DGFT. We have seen the said circular. For better appreciation, we reproduce the same :- Policy Circular No. 16 (RE-2012)/2009-14, dated 15-3-2013 To, All Regional Authorities All Development Commissioners, SEZ. Subject : Clarification regarding TED Refund where TED exemption is available. It has come to the notice of this Directorate that some RAs of DGFT and the Offices of Development Commissioners of SEZ are providing refund of TED ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Delhi-III vs. Neel Metal Products Ltd. reported in 2009 (237) E.L.T. 270 (P H); (vi) CCE Cus. vs. Purity Flexpack Ltd. reported in 2008 (223) E.L.T. 361 (Guj.) = 2008 (9) S.T.R. 125 (Guj.); (vii) Sarvesh Refractories (P) Ltd. vs. CCE Cus. reported in 2007 (218) E.L.T. 488 (S.C.). 11 . Though we have made a reference to the facts as involved in the case of M/s. Balakrishna Industries Limited, the identical facts and/or observations of the Commissioner are available in the other matters also and the legal issue involved is identical. In view of the foregoing discussion, the impugned orders are liable to be set aside. We order accordingly and allow all the appeals with consequential relief to the appellants. Miscellaneous applications for early hearing are also disposed of. The above decision was also upheld by Hon ble Rajasthan High Court reported as Commissioner vs. Balkrishna Industries Limited 2019 (366) ELT A23 (Raj) (c) In another judgment in the case of Shree Syam Filaments (supra) the Tribunal taken consistent view :- 3 . Heard both the sides. Though today the matter was listed for hearing of the stay application, since only a short issue is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the domestic suppliers in whose favour the invalidation letters had been obtained by the appellant from DGFT for duty free supply, should have supplied the inputs without payment of duty, but since they have paid the duty on these inputs, the amount paid towards duty cannot be treated as Central Excise duty and hence the appellant would not be eligible for its Cenvat credit. We find that this very issue has been considered at length of the Tribunal in the case of M/s. Oleofine Organics (India) Pvt. Ltd. M/s Fine Organics (India) Pvt. Ltd. v. CCE, Thane-I (supra) and the same stands decided in the favour of the appellant. Not only this, as held by the Apex Court in the case of CCE CUS v. MDS Switchgear Ltd. (supra), while considering availability of Cenvat credit to a manufacturer in respect of some inputs procured by him from another manufacturer, the quantum of duty already determined by the jurisdictional officers of the supplier unit cannot be contested or challenged by the officials in-charge of the recipient unit. In this case, there is no evidence produced that the assessment of duty at the end of the domestic suppliers had been reviewed and the duty paid by them ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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