2010 (10) TMI 1030 - AT - Central Excise

Benefit of N/N. 30/2004 - denial on the ground that the appellants were availing simultaneous benefit of two N/N. 29/2004 and N/N. 30/2004-CE - appellant took a stand that the credit availed in respect of inputs used in the manufacture of final product cleared under N/N. 30/2004 stands reversed by them and as such the same amounts to the fact as if no credit has been availed - Held that - reliance was placed in the case of COMMISSIONER OF CENTRAL EXCISE Versus ASHIMA DYECOT LTD. 2008 (9) TMI 87 - HIGH COURT GUJARAT , where it was held that reversal of credit amounts to non-taking of credit on the inputs - reversal of credit even at the appeal stage has been held in accordance with law. As regards quantum of reversal, the matter is remanded to Commissioner for fresh decision - appeal allowed by way of remand.

Summary

Issues: Disputed availment of benefits under Notifications No.29/2004 and No.30/2004-CE.

Analysis:
The judgment by the Appellate Tribunal CESTAT Ahmedabad, delivered by Mrs. Archana Wadhwa, addresses the issue of disputed availment of benefits under Notifications No.29/2004 and No.30/2004-CE. The appellant faced confirmed demands due to availing simultaneous benefits under both notifications. Notification No.29/2004 offers concessional duty rates subject to MODVAT Credit, while Notification No.30/2004 provides Nil duty rates with a condition of no credit availed on inputs. The appellant availed credit on common inputs used for final products under both notifications, leading to proceedings for denial of benefits under Notification No.30/2004. The appellant argued that the reversed credit equated to not availing any credit, but the Commissioner disagreed, stating the reversal was post-clearance and insufficient.

The appellant relied on Tribunal decisions stating pre-utilization credit reversal amounts to non-availment, citing the case of CCE Ahmedabad Vs. Ashima Dye Cot Ltd., upheld by the High Court of Gujarat. However, the JDR referenced Board Circulars and Supreme Court judgments emphasizing the need for credit reversal before utilization to fulfill exemption conditions. The Tribunal found the appellant ineligible for Notification No.30/2004 benefits due to post-clearance credit reversal and inadequacy of the reversed credit. The appellant cited High Court decisions supporting post-clearance reversals and assured the ability to prove equivalent reversed credit. Consequently, the Tribunal unconditionally allowed all stay petitions, overturned the orders, and remanded the matter for fresh consideration based on High Court rulings. The appellants were permitted to present evidence on the reversed credit quantity.

In conclusion, the judgment clarifies the conditions for availing benefits under Notifications No.29/2004 and No.30/2004-CE, emphasizing the importance of timely credit reversal to meet exemption criteria. The decision underscores the significance of legal precedents and the need for compliance with established principles in tax matters.