2009 (2) TMI 523 - AT - Central Excise

Summary

Issues:
1. Disallowance of Cenvat credit in respect of inputs used in the manufacture of cement supplied to earthquake-affected areas under an Exemption Notification.
2. Examination of the veracity of exempted cement subject to a show cause notice.
3. Applicability of proceedings initiated by two different show cause notices on the same subject matter.
4. Levying 8% on the value of exempted goods.
5. Repetitive litigation and consequential relief entitlement.

Issue 1 - Disallowance of Cenvat Credit:
The initial show cause notice proposed disallowing Cenvat credit related to inputs used in manufacturing cement supplied to earthquake-affected areas under an Exemption Notification. The appellant reversed the amount in compliance with a Board Circular. The Authority concluded that the reversed Cenvat credit was appropriated to the Government account, and no appeal was filed by the Revenue.

Issue 2 - Examination of Exempted Cement:
A subsequent show cause notice was issued to examine the exempted cement, leading to the proposal of an 8% levy on the value of the exempted goods due to an amendment in the law. The appellant argued that the proceedings from the previous notice had concluded with the reversal of Cenvat credit, leaving no room for repetitive litigation.

Issue 3 - Proceedings Initiated by Show Cause Notices:
The appellant contended that the proceedings initiated by the second show cause notice were unsustainable as they pertained to the same subject matter that had already been concluded in the earlier proceedings. The appellant sought consequential relief based on the previous resolution of the matter.

Issue 4 - Levying 8% on Exempted Goods:
The Revenue submitted that the proceedings initiated by the two show cause notices were distinct, with the first aimed at reversing Cenvat credit and the second focused on levying 8% on exempted goods. The Authority upheld the findings of the initial proceedings and deemed the subsequent proceedings lawful.

Issue 5 - Repetitive Litigation and Consequential Relief:
Upon review of the documents provided, it was evident that the show cause notice and order of adjudication from the earlier proceedings were linked to the current matter, indicating repetitive litigation on the same cause. The Tribunal acknowledged the appellant's right to be protected from such repetitive exposure to litigation and allowed the appeal, entitling the appellant to consequential relief as per the law.

In conclusion, the Tribunal allowed the appeal, emphasizing the importance of preventing repetitive litigation on the same cause and granting the appellant consequential relief in accordance with the law.