Self-Assessment of Payment of Excise Duty on Capital Goods is Eligible for Availment of CENVAT Credit by Recipient of Goods: CESTAT [Read Order]

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the self-assessment of Payment of excise duty on capital goods was eligible for availing of CENVAT Credit by the recipient of goods. 

Kris Flexipacks Pvt Ltd, the respondent-assessee availed CENVAT credit in respect of Excise Duty paid on capital goods namely ‘Engraved Ms. Copper Plated Rollers’ in a case where as per the department and the Capital Goods were exempted from payment of Central Excise Duty under Notification. 

The revenue appealed against the order passed by the Commissioner (Appeals) for allowing the assessee to avail of CENVAT credit on capital goods. 

Tara Prakash, the counsel for the revenue contended that since the capital goods were exempted under exemption notification and whatever the duty paid by the supplier cannot be treated as duty whereas the CENVAT credit was available only in respect of Excise duty paid in terms Section 3 of Central Excise Act, 1944 and thus the assessee was not eligible for CENAVT credit in this position. 

Further submitted that the decision made by the Commissioner by allowing the assessee to avail CENVAT credit in respect of paid excise duty on capital goods was not as per the law and liable to be deleted. 

Prakash Shah and Mihir Mehta, the counsels for the assessee contended that the supplier had made the payment of duty under the self-assessment procedure and was not objected to by the department. 

Also stated that once the duty payment had been accepted by the department and no objection was raised and thus it cannot be said that the duty paid by the supplier was not a duty of excise. 

The Bench observed that the payment of duty had been assessed and the same was not challenged the duty was paid by the supplier in terms of Section 3 of the Central Excise Act and the duty was legally available as CENAVT credit to the recipient. 

The two-member bench comprising Ramesh Nair (Judicial) and C.L Mahar (Technical) held that the Commissioner (Appeals) rightly allowed the CENVAT credit on capital goods to the assessee while dismissing the appeal filed by the revenue. 

To Read the full text of the Order CLICK HERE

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