Page 225 - ELT_1st August 2020_Vol 373_Part 3

2020 ] COMMR. OF CENTRAL EXCISE, BHARUCH v. HINDALCO INDUSTRIES LTD. 407

(132) E.L.T. 405 (Tri. - Mumbai)] following was held by CESTAT in para-
graph-7 of the order.
“7. Reasons given by the appellants for the alleged inflation of the
value of the intermediate goods are logical. What was required of
the Commissioner was to examine the quantum of the loading of
the assessable value by the Modvat credit on the earlier inputs. That
exercise has nowhere been done. If the Department was of the opin-
ion that the value of the final product was depressed, then they
could have charged the Jalgaon unit with under-invoicing of their
product. That has also not been done. The valuation as given by the
Sinnar unit was duly approved by the Department and the payment
of duty was also duly accepted. We find absolutely no substance in
the attempt of the Learned Commissioner to convert a part of the
duty so paid into “deposit of duty”. There is no legal basis for such
presumption. The rules entitled the recipient manufacturer to avail
of the benefit of the duty paid by the supplier manufacturer. A
quantum of duty already determined by the jurisdictional officers
of the supplier unit cannot be contested or challenged by the offic-
ers in charge of the recipient unit [2000 (120) E.L.T. 379 (T) = 2000
(38) R.L.T. 179 (T)].”
5. The above interpretation made by CESTAT was upheld by Hon’ble Su-
preme Court in their judgment dated 7-8-2008 reported at 2008 (229) E.L.T.
485 (S.C.). A similar view has been taken by Hon’ble High Court of Mum-
bai in the case of CCE Pune v. Ajinkya Enterprises [2012-TIOL-578-HC-MUM-
CX.]. In view of the settled law it is held that appellant has correctly taken
the CENVAT credit on the inputs received in the absence of any action tak-
en by the revenue at the supplier’s end.”
5.4 The similar issue the Tribunal Mumbai Bench in the case of MDS
Switchgear Ltd. (Supra) express the similar view which is as under :-
6. We have carefully considered the submission made before us.
7. Reasons given by the appellants for the alleged inflation of the value of
the intermediate goods are logical. What was required of the Commissioner
was to examine the quantum of the loading of the assessable value by the
Modvat credit on the earlier inputs. That exercise has nowhere been done.
If the Department was of the opinion that the value of the final product was
depressed, then they could have charged the Jalgaon unit with under-
invoicing of their product. That has also not been done. The valuation as
given by the Sinnar unit was duly approved by the Department and the
payment of duty was also duly accepted. We find absolutely no substance
in the attempt of the Learned Commissioner to convert a part of the duty so
paid into “deposit of duty”. There is no legal basis for such presumption.
The rules entitled the recipient manufacturer to avail of the benefit of the
duty paid by the supplier manufacturer. A quantum of duty already de-
termined by the jurisdictional officers of the supplier unit cannot be con-
tested or challenged by the officers in charge of the recipient unit [2000
(120) E.L.T. 379(T) = 2000 (38) R.L.T. (179) (T)].
8. We find that the entire process from the issue of the show cause notice
to the determination of the liability to be not based on the relevant law. The
proceedings do not survive. The impugned order is set aside. The appeals
are allowed with consequential relief.”

EXCISE LAW TIMES  1st August 2020  225