TMI Blog2023 (7) TMI 943X X X X Extracts X X X X X X X X Extracts X X X X ..... the supplier is in terms of Section 3 of Central Excise Act, 1944 and this duty is clearly, legally available as Cenvat credit to the recipient. Moreover, if the department is of the view that the supplier was not supposed to pay the duty in such case, the jurisdiction Officer at supplier end should have issued a Show Cause Notice for recovery of such amount under Section 11D of Central Excise Act, 1944, which was not done by the department. This further reinforce the claim of the respondent about their Cenvat credit. This issue has been considered time and again in various judgments - reliance can be placed in the case of COMMISSIONER OF CENTRAL EX. CUS., SURAT-III VERSUS CREATIVE ENTERPRISES [ 2008 (7) TMI 311 - GUJARAT HIGH COURT] where it was held that The Tribunal is justified in holding that if the activity of the respondent-assessee does not amount to manufacture there can be no question of levy of duty, and if duty is levied, Modvat credit cannot be denied by holding that there is no manufacture. - The judgment of Hon ble Gujarat High Court has been affirmed by the Hon ble Supreme Court, in COMMISSIONER OF CENTRAL EXCISE CUSTOMS VERSUS MDS SWITCHGEAR LTD. [ 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Prakash Shah, Learned counsel with Shri Mihir Mehta, Advocate appearing for the respondent at the outset submits that the supplier have made the payment of duty under self-assessment procedure. The said assessment of duty payment was not objected with by the department, therefore, the said assessment attained finality. Once the duty payment has been accepted by the department and no objection was raised, it cannot be said that the duty paid by the supplier is not a duty of excise. he submits that even in case, where the excise duty is admittedly not payable but the supplier of the goods discharge the excise duty and the said payment is not objected, no objection can be raised at the recipient and in this regard he placed reliance on the following judgments: Commissioner of Central Excise Customs vs MDS Switchgear Ltd., 2008 (229) E.L.T. 485 (S.C.) Commissioner of Central Ex. Customs, Surat - III vs Creative Enterprises, 2009 (235) E.L.T. 785 (Guj.). Upheld by Hon'ble Supreme Court in 2009 (243) E.L.T. A120 (S.C.) Commissioner of C. Ex., Ahmedabad III vs. Nahar Granites Ltd., 2014 (305) E.L.T. 9 (Guj.) Commissioner of Central Excise, Goa vs. Nestle India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they have duly discharged the payment of Excise duty, they have issued invoices and filed their returns to their Jurisdiction Central Excise Officer. The Jurisdictional Central Excise officer of supplier has not whisper a word about alleged wrong assessment of duty. The department had jolly well accepted the Act of the supplier that is payment of Excise Duty. The self-assessment of payment of excise duty has attained finality as no objection was raised by the department against the supplier. Therefore, rightly or wrongly, if the assessment at the supplier s end has been accepted and no objection was raised, the same cannot be disputed at the recipient of goods for availment of Cenvat credit by the recipient. Since, the payment of duty has been assessed and the same was not challenged the duty was paid by the supplier is in terms of Section 3 of Central Excise Act, 1944 and this duty is clearly, legally available as Cenvat credit to the recipient. 4.1 Moreover, if the department is of the view that the supplier was not supposed to pay the duty in such case, the jurisdiction Officer at supplier end should have issued a Show Cause Notice for recovery of such amount under Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to why Modvat credit amounting to Rs. 13,08,701/- should not be disallowed under Rule 57-I of the Rules read with proviso to Section 11A(1) of the Central Excise Act, 1944 and to show cause as to why interest and penalty should not be levied and as to why plant, machinery, building etc. should not be confiscated. 5. By the order-in-original dated 30th October 2000, the Commissioner of Central Excise Customs, Aurangabad confirmed the demand of Rs. 13,08,701/- under Section 11A of the Act and imposed a penalty equivalent to the amount of duty under Section 11AC of the Act and also a penalty of Rs. 1,00,000/- under Rule 173Q of the Rules. Recovery of interest under Section 11AB of the Act was also ordered. 6. Aggrieved by the above order-in-original, the assessee preferred an appeal before the Tribunal which has been accepted by the impugned order. Revenue, being aggrieved, has filed the present appeal. 7. The Tribunal has come to the conclusion that in fact there was no loss of revenue. It accepted the appeal by recording the following reasons : Reasons given by the appellants for the alleged inflation of the value of the intermediate goods are logical. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel has read extensively from the show cause notice and the order made by the adjudicating authority to contend that the respondent was not a manufacturer but was merely an agent of Dr. Beck Company (I) Limited. It was submitted that in the circumstances, in absence of any independent manufacture by the respondent, there was no question of the respondent being entitled to Modvat credit under Rule 57-I(1)(iii) of the Central Excise Rules, 1944. That the Tribunal had erroneously placed reliance on its own decision in case of the respondent assessee despite the fact that the said order of Tribunal dated 28-10-2003 had been challenged by way of Tax Appeal Stamp No. 815 of 2004. The learned counsel has also placed reliance on the Apex Court order in case of Thiagaraja Engineering Enterprises v. Assistant Collector of Central Excise, 1996 (88) E.L.T. 312 (S.C.) = (1997) 10 SCC 241. 3. Against the order made by the adjudicating authority, the respondent assessee carried the matter in appeal and the first appellate authority allowed the appeal after recording following facts. 4. I have examined the records of the case and the submissions made in memorandum of appeal as we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , I find that the appellant has received duty paid raw materials, the said raw material has been received in the factory and were utilized in the manufacture of final products. In view of this and considering the position as indicated above, I set aside the impugned order and allow the Modvat credit of Rs. 1,70,53,294.00. I also set aside the penalty of Rs. 5,00,000/- and demand of interest under Section 11AB of the Central Excise Act, 1944. 4. The Tribunal in the impugned order after recording facts in paragraph No. 2 of its order has noted that in assessee s own case in respect of same issue, for an earlier period, it was held by Tribunal that the assessee cannot be denied modvat credit by observing as under : 4. The learned Advocate appearing on behalf of the respondents submits that in respect of the same issue and in the same assessee s case, the Tribunal has held that the assessee cannot be denied the Modvat credit. Vide final order No. CB/470/03-WZB dated 28-10-2003, the Tribunal held as under:- We have perused the records and have considered the submissions made by both sides. The present order is clearly unjust and cannot be allowed to stand. The appella ..... X X X X Extracts X X X X X X X X Extracts X X X X
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