Supplier of Rotogravure Printing Cylinder are Eligible to Avail CENVAT Credit of Wrongly paid Excise Duty: CESTAT [Read Order]

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the supplier of rotogravure printing cylinders is eligible to avail of the CENVAT Credit of wrongly paid excise duty. 

Modern Packaging Company, the appellant assessee engaged in the manufacture of packaging material falling under Chapter heading 39 and 48 of the Central Excise Tariff Act, 1985 and they had procured printing cylinder required for the production of packing material from Accuprint Systems, Mumbai, and the supplier-manufacturer had cleared the cylinder on payment of excise duty. 

The assessee appealed against the order passed by the Commissioner (Appeals) for confirming the demand for CENVAT Credit which was availed by the assessee. 

P.K. Shetty, the counsel for the assessee contended that the denial of CENVAT credit to the appellant is that the supplier of the printing cylinder was not supposed to pay the duty as the same were exempted under Notification No. 49/2006 and the duty was wrongly paid by the supplier and consequently, the assessee was eligible for CENVAT credit for such duty wrongly paid. 

Also submitted that the entire basis of the denial of CENVAT credit that the supplier unit was supposed to avail of the Exemption Notification was incorrect on the face of clarification issued by the suppliers’ jurisdictional Chief Commissioner whereby it was clarified that the goods manufactured by the supplier manufacturer had paid the duty correctly and also directed to continue paying duty without availing the benefit of Notification. 

A.K. Samota, the counsel for the department relied on the decisions made by the lower authorities and contended that the demand raised by the revenue was as per the law and liable to be sustained. 

The Bench observed that the jurisdictional officer of the assessee has no jurisdiction to question the assessment or correctness of the payment of duty and the assessee had correctly availed the CENVAT credit on the Rotogravure Printing Cylinder supplied by Accuprints System. Hence the demand was not sustainable. 

The two-member bench comprising Ramesh Nair (Judicial) and Raju (Technical) quashed the demand of CENVAT Credit which was availed by the assessee on wrongly paid excise duty while allowing the appeal filed by the assessee. 

To Read the full text of the Order CLICK HERE

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