2016 (11) TMI 1485 - AT - Central Excise

CENVAT credit - inward transportation of sugarcane service - Held that - the issue is no more res integra in terms of the decision of the Hon ble Allahabad High Court in the case of Balrampur Chini Mills Ltd. vs. UOI 2013 (1) TMI 525 - ALLAHABAD HIGH COURT wherein the Board Circular No.904/24/2009-CX dated 28.10.2009 requiring reversal of credit or payment of amount in terms of Rule 6 stands quashed - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Disallowance of CENVAT credit on inward transportation of sugarcane services
- Rejection of appeals by Commissioner (A)
- Reduction of penalty by Commissioner (A)

Analysis:
1. Disallowance of CENVAT credit on inward transportation of sugarcane services:
The appellant, engaged in the manufacture of various products falling under Chapter 17/22 of CETA, 1985, availed CENVAT credit on inward transportation of sugarcane services. However, a show-cause notice was issued questioning the credit availed, leading to disallowance of a portion of the credit by the Assistant Commissioner. The appellant contested this disallowance, leading to appeals before the Commissioner (A) who upheld the disallowance partially but reduced the penalty imposed. The appellant further appealed against this decision.

2. Rejection of appeals by Commissioner (A):
The appellant argued that the order disallowing the CENVAT credit was not legally sustainable and contrary to decisions from higher judicial authorities. The appellant cited various cases in support of their argument, emphasizing that the issue had been settled in favor of the assessee in multiple instances. The Commissioner (A) rejected the appeals but reduced the penalty imposed, prompting the appellant to file further appeals.

3. Reduction of penalty by Commissioner (A):
The Commissioner (A) reduced the penalty imposed on the appellant from the initial amount to a significantly lower sum. This reduction in penalty was one of the factors that led the appellant to file additional appeals seeking a more favorable outcome.

In the final judgment, the Tribunal, after considering the arguments presented and the precedents cited, concluded that the issue regarding the disallowance of CENVAT credit on inward transportation of sugarcane services was settled in favor of the appellant. The Tribunal referenced specific cases where similar issues had been decided in favor of the assessee, leading to the setting aside of the impugned order and allowing both appeals with any consequential relief. The decision was pronounced on a specific date, providing a clear resolution to the issues raised in the appeals.