2015 (6) TMI 983 - HC - Central Excise

Availment of CENVAT Credit - Capital goods - Rule 57Q(3) of the Central Excise Rules, 1944 - Held that - It is appropriate that the present appeal be disposed of in terms of the earlier judgment of this Court as referred to herein above, since the questions of law that arise for consideration in this appeal have already been answered by the Division Bench of this Court 2014 (5) TMI 790 - Karnataka High Court . Since the same are pending adjudication before the Hon ble Supreme Court, it is needless to state that any order that is to be passed by the Hon ble Supreme Court would be applicable to the parties herein. - Appeal disposed of.

Summary

Issues involved:
1. Wrong availing of Cenvat credit on imported capital goods.
2. Confirmation of demand and penalty imposition by Additional Commissioner.
3. Appeal dismissal by Commissioner (Appeals).
4. Appeal allowance by CESTAT leading to Revenue's appeal.
5. Applicability of Cenvat scheme.
6. Interpretation of Rule 57Q(3) of the Central Excise Rules, 1944.
7. Setting aside of penalty on debt payable upon capital goods.
8. Precedent set by a previous Division Bench judgment.
9. Pending adjudication before the Hon'ble Supreme Court.

Analysis:
1. The case involved the Superintendent of Central Excise noting the wrongful availing of Cenvat credit on imported capital goods by the respondent based on reconstructed bills of entry. A show cause notice was issued, leading to confirmation of demand and penalty imposition by the Additional Commissioner, which was upheld in the appeal dismissed by the Commissioner (Appeals). The respondent's successful appeal before CESTAT resulted in the Revenue filing the present appeal.

2. The substantial questions of law admitted for consideration included the correctness of Cenvat scheme application, the Tribunal's decision to grant Cenvat credit despite Rule 57Q(3) provisions, and the distinction made by the Tribunal on facts rather than merits or principles.

3. The appellant argued that a previous Division Bench judgment addressed similar substantial questions of law, favoring the Revenue. The Division Bench answered in favor of the Revenue and against the assessee, leading to the matter being taken to the Hon'ble Supreme Court in a pending Special Leave Petition.

4. Given the similarity of questions raised in the present appeal to those addressed in the earlier judgment, the High Court decided to dispose of the present appeal in line with the previous ruling. The decision of the Hon'ble Supreme Court in the pending Special Leave Petition would be binding on the parties involved, thereby allowing the appeal in favor of the Revenue.

5. The judgment concluded by stating that the substantial questions of law were answered in favor of the Revenue, referencing the earlier Division Bench judgment and highlighting the binding nature of the forthcoming decision by the Hon'ble Supreme Court on the pending Special Leave Petition.