The Bombay High Court has held that the even if excise duty is not payable on the product for any reason, but the Assessee has paid the excise duty and payment is not challenged or questioned then no question can be raised as regards availment of the CENVAT credit by the recipients of goods.

The bench of Justice M. S. Sonak and Justice Jitendra Jain while upholding the ruling of the tribunal held that there is no evidence on record that the payment of duty by the supplier was questioned / challenged / disputed by their jurisdictional officer and since the payment of duty by the supplier is found to be legal and correct, the Respondent – Assessee cannot be denied benefit of CENVAT credit.

The Appellant department filed the appeal under Section 35G of the Central Excise Act, 1944. The short issue involved in the appeal, as per the department is whether CENVAT Credit on“Engraved Printing Cylinder” & “Copper Engraved Cylinder” can be denied to the Respondent-Assessee on the ground that Cylinder were not liable to pay the excise duty although the supplier from whom the Respondent-Assessee has purchased these goods has wrongly paid the duty, since these goods were exempted and no duty was required to be paid by the supplier.

The Tribunal found that there is no evidence on record that the payment of duty by the supplier was questioned / challenged / disputed by their jurisdictional officer and since the payment of duty by the supplier is found to be legal and correct, the Respondent-Assessee cannot be denied benefit of CENVAT credit. The department has not challenged this finding of fact as incorrect. 

The court held that the Tribunal has applied the judgments since the facts were identical and no perversity is shown to us by the department in the approach of the Tribunal. 

Case Details

Case Title: Commissioner of CGST & Central Excise Versus Huhtamaki PPL Ltd.

Case No.: Central Excise Appeal No.46 Of 2024

Date: 19 December 2024

Counsel For Appellant: Karan Adik

Counsel For Respondent: Prakash Shah