Commissioner of CGST & Central Excise, Daman Commissionerate v. Huhtamaki PPL Ltd.
Central Excise – CENVAT Credit on exempted goods – Whether credit availed is valid when duty was paid erroneously by the supplier – No substantial question of law arises when factual findings remain unchallenged.

The Bombay High Court held that CENVAT Credit availed on exempted goods cannot be denied if the duty paid by the supplier is not questioned by the Revenue. The Tribunal’s order was upheld as it relied on established precedents and findings that remained unchallenged.

1. Introduction and Context (Para 1-2)

• Fact: The Revenue filed an appeal under Section 35G of the Central Excise Act, 1944, contesting the CESTAT order allowing CENVAT Credit for Huhtamaki PPL Ltd.
• Issue Raised:
  • Validity of CENVAT Credit on exempt goods where duty was erroneously paid.
  • Whether the Tribunal erred in dropping the duty demand of ₹2,04,41,446/-.

2. Tribunal's Findings (Para 3-4)

• Finding: The Tribunal noted no evidence to challenge the supplier’s duty payment. The payment was deemed legal and correct, allowing the Respondent to avail of CENVAT Credit.
• Analysis: This factual finding was unchallenged by the Appellant, leaving no scope for a substantial question of law.

3. Precedents Relied Upon (Para 5)

• Key Decisions:
  • Commissioner of Central Excise v. Nestle India Ltd. (Bom).
  • Commissioner of Central Excise, Customs and Service Tax v. Kris Flexipacks Pvt. Ltd.
• Ratio: When duty payment is not contested, CENVAT Credit availed by recipients cannot be denied.

4. Consistency with High Courts and Tribunal (Para 6)

• Supporting Judgments: Decisions from Gujarat, Madras, and Punjab & Haryana High Courts affirm the principle that unchallenged duty payments validate CENVAT Credit.
• Analysis: Tribunal’s reliance on consistent judgments across jurisdictions was deemed correct.

5. Dismissal Based on Similar Precedents (Para 7)

• Precedent Cited: Commissioner of Central Excise v. M/s Betts India Ltd.
• Court’s Stance: Identical fact situations supported dismissal of the Revenue's appeal.

6. Conclusion (Para 8)

• Decision: No substantial questions of law arise from the Tribunal’s findings. The appeal was dismissed.

Acts and Sections Discussed:

• Central Excise Act, 1944: Section 35G (Appeal to High Court).
• CENVAT Credit Rules, 2004: Rule 3 (Conditions for availing credit).
• Notification No. 49/2006-C.E.: Goods exempted from excise duty.
• Section 11D: Deposit of duty collected but not payable.

Ratio Decidendi:

1. When excise duty is erroneously paid but not questioned by the jurisdictional authorities, the recipient is entitled to CENVAT Credit.
2. Judicial consistency across multiple forums affirms that unchallenged duty payments cannot invalidate the availment of CENVAT Credit.

Subjects:

• Central Excise
• CENVAT Credit Rules

#CENVATCredit #CentralExcise #HighCourtJudgment #TaxAppeal #TribunalDecision