2005 (6) TMI 510 - AT - Central Excise

Summary

Issues: Interpretation of CENVAT credit eligibility on explosives used in mines, applicability of previous Tribunal decisions, imposition of penalty.

Interpretation of CENVAT Credit Eligibility:
The appellant's representative argued that based on the judgment in a specific case, they do not contest the findings of the Commissioner (Appeals) but requested the penalty to be revoked. It was contended that CENVAT credit for explosives used in mines was admissible before an amendment, citing various Tribunal decisions supporting this view. The representative emphasized that the penalty should be set aside as it was a matter of interpretation. Reference was made to previous cases like M/s. Ambuja Cement Eastern Ltd. and Manglam Cement Ltd. to support this argument.

Applicability of Previous Tribunal Decisions:
The respondent's representative countered that the Tribunal's decisions before the period in question were not relevant to the current case, which involved a different time frame. Referring to a Supreme Court decision, it was argued that CENVAT credit for inputs used in mines outside factory premises was disallowed. Consequently, the respondent suggested dismissing the appeals based on this premise.

Imposition of Penalty:
Upon careful consideration of both sides' submissions, the judge noted that before an amendment, the Department and Tribunal allowed CENVAT credit for inputs used in mines outside factory premises. However, post a Supreme Court decision and a subsequent circular by the Department, this credit was disallowed. The judge highlighted that the situation required interpretation, and the appellants could not be faulted for following the prevalent practice. Citing precedents, the judge emphasized that when interpretation of statutes/rules/circulars is involved, penalizing parties is not appropriate. The judge found the appellants' case aligning with previous decisions and partially allowed the appeal by setting aside the penalty while rejecting other modifications.

This judgment, delivered on June 30, 2005, by Shri M.P. Bohra at the Appellate Tribunal CESTAT, Kolkata, provides a detailed analysis of the interpretation of CENVAT credit eligibility, the relevance of previous Tribunal decisions, and the imposition of penalties in the context of explosives used in mines.