IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. CEA No.42 of 2010 Date of decision: 22.7.2010 Commissioner Central Excise, Chandigarh. -----Appellant. Vs. M/s Guwahati Carbons Ltd. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. H.P.S. Ghuman, Advocate for the appellant. Mr. Jagmohan Bansal, Advocate for the respondent. --- ADARSH KUMAR GOEL, J. 1. This appeal has been preferred by the Revenue under Section 35-G of the Central Excise Act, 1944 (for short, “the Act”) against order dated 24.3.2006 of the Commissioner (Appeals) and order dated 24.12.2008 of the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (for short, “the CESTAT”). The Revenue has claimed that the following substantial question of law arises in the appeal:- “(i) Whether the Hon’ble CESTAT is justified in allowing the benefit of availment of Cenvat Credit to M/s DCM Engrr. Products in respect of Excess duty paid by respondent in contravention of CEA No.42 of 2010 Rule 5 of the Valuation Rules, read with Notification No.11/03-CE (NT) dated 1.3.2003. (ii) Whether the Hon’ble CESTAT is right in dismissing the appeal of the Revenue, when the main appeal against respondent M/s Guwahati Carbon Ltd. is still pending decision before CESTAT, Kolkata”. 2. The respondent-assessee made purchases from M/s Guwahati Carbons Ltd. and paid excise duty. The cost of goods was paid by the said firm, but on the excise duty so paid MODVAT Credit was claimed. The stand of the Revenue is that the duty paid was more than due and to that extent, credit could not be availed. The Adjudicating Authority required the Assessee to reverse the MODVAT Credit availed by it and also imposed penalty. On appeal, the said view was reversed. It was held that once the duty was paid, higher CENVAT Credit could be availed and there was no justification for effecting recovery or even imposing penalty. Further appeal of the Revenue before the Tribunal failed. It was observed:- “....The record reveals that the only charges levelled by the revenue was that the freight was added to the basic price at the time of clearance, which has boosted the excise liability. Other than this charge, there is no evidence brought to show that both parties are intentionally doing any act which was caused an evasion to the revenue. No intention of the parties has been proved to bring them to charge. Therefore, duty paid by M/s D.C.M. Engineering Ltd. 2 CEA No.42 of 2010 having gone into the treasury through M/s Guwahati Carbon Ltd., the respondent D.C.M. Engineering Ltd. should not be debarred to take credit of the same in the absence of any questionable conduct. Finding no material against both the respondents, revenue fails in both these appeals, Accordingly, both these appeals of the revenue are dismissed. In view of the above dismissal, cross objection in appeal No.3728 is also disposed.” 3. We have heard learned counsel for the parties. 4. Learned counsel for the appellant submits that the duty paid was more than due in as much as freight charges were wrongly included in the assessable value of goods. However, Learned counsel for the Revenue is unable to show any law that even if duty paid was in excess of the amount due, without excess amount being refunded, the assessee will be debarred from availing of the CENVAT Credit. 5. On the other hand, learned counsel for the Assessee relies on judgments of this Court in CCE v. Ranbaxy Labs Ltd. [2006] 203 ELT 213 and CCE v. Swaraj Automotives Ltd. [2002] 139 ELT 504 and judgment of Madras High Court in CCE v. CEGAT, Chennai [2006] 202 ELT 753 and also circular issued by the Central Board of Excise & Customs, New Delhi being Circular No.877/15/2008-CX., dated 17.11.2008 to submit that credit could be availed to the extent of duty paid. 3 CEA No.42 of 2010 6. Since the view taken by the Tribunal is consistent with the view taken earlier by this Court, the questions proposed cannot be held to be substantial questions of law. The appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE July 22, 2010 ( AJAY KUMAR MITTAL ) ashwani JUDGE 4