2010 (5) TMI 407 - HC - Central Excise

Cenvat credit - adjustment of the CENVAT credit, which it had reversed on the raw material, against the duty liability as settled by the Settlement Commission - credit was not permissible on inputs, which were used in the manufacture of exempted goods - invoice-wise details were placed before the Settlement Commission along with the said letter (as Annexure-1) which was filed subsequent to the hearing Held that - observation of the Settlement Commission that no evidence or precise data had been produced proving the exact amount of duty paid on the inputs gives an impression as if the petitioner had not filed any information at all - Settlement Commission is directed to examine this aspect of the matter only and pass an appropriate order. The re-examination by the Settlement Commission will be limited to this aspect of the matter based on the documents which were filed prior to the date of final hearing given by the commission - petition stands disposed of.

Summary

Issues:
Adjustment of CENVAT credit against duty liability before Settlement Commission.

Analysis:
The writ petition challenged an order by the Settlement Commission under Section 32F(7) of the Central Excise Act, 1944, regarding the adjustment of CENVAT credit against duty liability. The petitioner, a manufacturer of claddings and railings, sought adjustment of CENVAT credit reversed on raw materials against the duty liability settled by the Commission. The Commission's order highlighted the non-compliance with Rule 6 of the CENVAT Credit Rules, 2004, regarding the availing of credit on inputs used in manufacturing exempted goods. The Commission noted the petitioner's failure to follow the prescribed procedure for availing CENVAT credit on inputs used in both dutiable and exempted goods. It was observed that the final products were not exempted goods and that no evidence was presented to prove the duty paid on inputs used in goods cleared without discharging duty liability.

The petitioner emphasized providing specific data for the adjustment in a letter to the Commission, enclosing invoice-wise details of payments made for credit reversal on inputs or payment of 10%. The petitioner requested the Commission to consider these payments for adjustment against the admitted duty liability. The Court acknowledged that the petitioner had submitted relevant information and invoice-wise details at pages 45-54 of the application, contrary to the Commission's observation of no evidence or precise data being produced. The Court directed the Settlement Commission to re-examine this aspect of the matter based on the documents filed before the final hearing, allowing either party to provide additional information if required.

In conclusion, the Court disposed of the petition, instructing the Settlement Commission to reconsider the adjustment of CENVAT credit against duty liability based on the evidence submitted by the petitioner. The Commission was directed to limit the re-examination to the documents filed before the final hearing, with the option to request further information from the parties if necessary.