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2015 (12) TMI 1541 - AT - Central ExciseRejection of refund claim - CENVAT Credit availed by appellants did not represent duty of excise - Held that - The issue is covered by the judgment of the Tribunal in Neuland Laboratories Ltd Vs C C E Hyderabad 2013 (11) TMI 1339 - CESTAT BANGALORE . Further that the appeal filed by the Revenue against the said judgment was dismissed by the Hon ble High Court of Andhra Pradesh upholding the judgment of the Tribunal Commissioner Vs Neuland Laboratories Ltd. (2015 (10) TMI 669 - ANDHRA PRADESH HIGH COURT . It is not disputed that the appellants purchased the inputs/ethanol from the suppliers. It is also not disputed that the appellants paid duty on the goods. The credit is sought to be denied at the end of the receiving manufacturer on the ground that no duty is payable on the goods. - Decided in favour of assessee.
Issues:
1. Availment of CENVAT Credit on duty paid on ethanol. 2. Reversal of credit under protest. 3. Rejection of refund claim. 4. Interpretation of duty of excise on ethanol. 5. Applicability of previous Tribunal judgment. Analysis: Issue 1: Availment of CENVAT Credit on duty paid on ethanol The appellants, manufacturers of Bulk drugs and drug intermediaries, availed credit on duty paid on ethanol purchased from various suppliers. The Central Excise Department contended that ethanol is a non-excisable product, and the credit availed was incorrect. The appellants reversed the credit under protest as per the department's instructions but later filed a refund claim. The original authority rejected the refund claim, leading to the appeal before the Commissioner (Appeals) and subsequently before the Tribunal. Issue 2: Reversal of credit under protest The appellants reversed the credit based on the Superintendent of Central Excise's instructions, even though the credit was availed on valid central excise invoices and under valid payment of duty. The grounds for reversal were that the manufacturer-supplier was not required to pay duty. However, since the amount was collected as duty of excise on valid invoices, the Tribunal found it puzzling how it could cease to be duty on the receiver's end. Issue 3: Rejection of refund claim The refund claim was rejected on the basis that the amount claimed did not represent duty of excise. Despite the appellants purchasing ethanol, paying duty on the goods, and following proper procedures, the department rejected the refund claim. The Tribunal found this rejection unjustifiable. Issue 4: Interpretation of duty of excise on ethanol The Tribunal referred to a previous judgment involving a similar issue, emphasizing that the duty paid on ethanol was indeed a duty of excise. The judgment highlighted that the duty was paid on valid invoices and should not be denied at the receiving manufacturer's end. Applying the precedent, the Tribunal deemed the impugned order unsustainable. Issue 5: Applicability of previous Tribunal judgment The Tribunal noted that a previous judgment by the Tribunal, upheld by the High Court, covered the issue in the present case. The judgment clarified that duty was paid on the goods purchased, and the denial of credit based on the absence of duty payable on the goods was incorrect. Consequently, the Tribunal set aside the impugned order and allowed the appeal with any consequential reliefs. This detailed analysis of the judgment showcases the intricacies of the issues involved and the Tribunal's thorough examination leading to the decision in favor of the appellants.
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