2012 (7) TMI 916 - HC - Central Excise

Summary

Issues involved: Department's appeal against the order of Customs Excise and Service Tax Appellate Tribunal, questions on Cenvat credit availability, error in Tribunal's decision, non-imposition of penalty and interest.

Cenvat credit availability: The Department appealed against the Tribunal's order on whether Cenvat credit is available on inputs used in manufacturing exempted goods in violation of Rules 57AD of the Central Excise Rules, 1944. The Department raised this issue along with another question regarding the Tribunal's reliance on a decision of the Larger Bench of the Tribunal, for which the Department had filed a Special Leave Petition (SLP) that was granted. The appellant also added an additional question in the appeal memorandum regarding the Tribunal's failure to decide on the non-imposition of penalty and interest on the respondent.

Judgment and remand: The Division Bench of the High Court dismissed the Tax Appeal filed by the Department, citing a previous decision of the Supreme Court. Subsequently, the respondent filed a review application, which was disposed of by another Division Bench of the High Court. The Court observed that the issue required fresh consideration by the Tribunal, as the decision relied upon by the Tribunal had been reversed by the Supreme Court. The case was remanded to the Customs Excise and Service Tax Appellate Tribunal for fresh consideration in accordance with the law, after hearing both sides. The High Court directed that the proceedings should be connected with the matter remanded by the Division Bench's previous order. The appeal was disposed of with these directions.