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PJ/Case Laws/2012-13/1153

Whether the credit can be taken on non-duty paid inputs?
Case:-COMMISSIONER OF CENTRAL EXCISE VS JAGATPAL PREMCHAND LTD.
 
Citation: - 2012 (280) E.L.T. 161 (Bom.)
Issue: - Whether the credit can be taken on non-duty paid inputs?
 
Brief fact: -  The brief fact of the case is that  by Order-In-Original No. 29 of 98 (14-7-1998) it was held that the assessee had erroneously taken credit of the duty paid on input received from Sharp Industries Ltd., because no duty was paid by Sharp Industries Ltd. on those inputs which were sold to the assessee. As the duty was not paid on the inputs, the assessee could not have taken credit of the duty on those inputs. Accordingly, the demand confirmed by the aforesaid order-in-original was challenged before the CESTAT. The CESTAT by its order dated 6-5-2005 has set aside the demand by relying upon its order in the Assessee's own case dated 1-10-2004 12004 (178) E.L.T. 792 (T). Perusal of the order of CESTAT dated 1-10-2004 shows that the dispute in that case was, whether the assessee had cleared the finished products without payment of duty and the Tribunal held that Revenue failed to establish that manufactured goods have been cleared without payment of duty.
 
Reasoning of Judgment:   In opinion of High Court, the decision on the question as to whether the finished products were cleared without payment of duty or not was wholly irrelevant for deciding the question as to whether the inputs received by the assessee from Sharp Industries Ltd. were duty paid or not. Thus, the decision of the Tribunal in setting aside the demand raised on account of the alleged wrongful credit taken on the inputs received by the assessee by relying on the decision dated 1-10-2004 is erroneous as the said decision has no bearing on the question which arises from the order-in-original. In this view of the matter, impugned order dated 6-5-2005 is quashed and set aside and the matter is remanded back with a direction to the Tribunal to decide the appeal on merits and in accordance with law
Decision: -Appeal allowed.
 

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