2010 (7) TMI 444 - HC - Central Excise

Cenvat credit input Common input used in dutiable and exempted final products - stand before the lower authorities that either they have not availed the CENVAT Credit on the inputs and if availed they have reversed proportionately - Tribunal primarily go to show that the direction was to re-determine the credit taken on common inputs and accept the offer to reverse such entire credit on common inputs insofar as they relate to demand proposed in the nine show cause notices Appeal dismissed in view of Commissioner of Central Excise, Ahmedabad-II v. Maize Products (2008 -TMI - 48307 - HIGH COURT OF GUJARAT).

Summary

Issues:
1. Challenge to order under Section 35-G of the Central Excise Act, 1944.
2. Entitlement of an assessee to follow a different system under the Rules.
3. Justification of the system followed by the assessee for credit reversal.
4. Reliance on case laws by the Tribunal.
5. Confirmation of demand against the respondent-assessee.
6. Assailing the impugned order by the Tribunal.
7. Conclusion of controversy based on previous court decision.
8. Dismissal of the appeal.

Analysis:

1. The appeal under Section 35-G of the Central Excise Act challenged the order made by the Customs, Excise and Service Tax Appellate Tribunal, which raised questions regarding the entitlement of an assessee to follow a system different from the one provided under the Rules and still receive benefits. The demand was confirmed against the respondent-assessee based on Rule 6(3)(b) of the Cenvat Credit Rules, 2004, for not paying 8% of the price of exempted goods at the time of clearance of finished goods.

2. The Tribunal directed the Commissioner to verify the correctness of the reversal of credit by the appellant. The appellant-revenue argued that the Tribunal should not have directed a different system than the one provided under the Rules. However, the advocate for the respondent referred to a previous court decision to support the assessee's position.

3. The Tribunal found that the appellant had not verified their claim regarding the availing and reversal of CENVAT Credit properly, leading to the matter being remanded to the Commissioner for verification. The Tribunal also decided not to impose a penalty on the appellant. The Court referred to a previous case where the Tribunal directed the re-determination of credit taken on common inputs and accepted the offer to reverse the entire credit.

4. Based on the impugned order, the Court concluded that the controversy in the present case was similar to the one in the cited decision, which favored the assessee. Therefore, the Court dismissed the appeal, following the reasoning and decision of the previous case.

In conclusion, the Court upheld the Tribunal's decision, emphasizing the importance of verifying the correctness of credit reversal and following legal procedures in determining the entitlement of an assessee under the Cenvat Credit Rules.