2011 (3) TMI 323 - AT - Central Excise

Waiver of pre-deposit - Appellants received inputs from an 100% EOU - Rule 3(7) of Central Excise Rules - modvat credit excess taken and subsequently reversed - Refund claims - Refund claims filed by the appellants to the extent of Rs. 5,84,098/- stands sanctioned by the original adjudicating authority. As such, it is the contention of the appellants that they were required to reverse only an amount of Rs.1,04,931/- The interest, if any, is required to be confirmed is only in respect of the above amount - Learned advocate does not dispute that interest is required to be paid by them but submits that matter be remanded for re-quantification of amount - set-aside the impugned order and remand the matter to original adjudicating authority for re-quantification of interest amount on the modvat credit excess taken by the appellant and subsequently reversed by them

Summary

Issues:
1. Calculation of cenvat credit from goods received from 100% EOU.
2. Reversal of excess cenvat credit and subsequent interest.
3. Availability of Education Cess and Secondary & Higher Education Cess credit.
4. Refund claim filed by the appellants.
5. Re-quantification of interest amount on excess cenvat credit.

Analysis:
The judgment by Mrs. Archana Wadhwa of the Appellate Tribunal CESTAT, Ahmedabad dealt with the issue of cenvat credit calculation from goods received from a 100% EOU. The appellant had received inputs from a 100% EOU, and an audit objection revealed that the cenvat credit availed was in excess of the prescribed formula under Rule 3(7) of the Central Excise Rules. Consequently, the appellant reversed the excess amount of Rs. 6,89,019, leading to proceedings concerning the interest on the reversed cenvat credit.

Regarding the availability of Education Cess and Secondary & Higher Education Cess credit, the appellants realized that the amount reversed included these components, which were available to them based on previous tribunal decisions. They filed a refund claim for Rs. 5,84,098, which was sanctioned by the original adjudicating authority. The contention was that only Rs. 1,04,931 needed to be reversed, and any interest should be calculated on this reduced amount.

The judgment acknowledged the need for interest payment by the appellants but agreed to remand the matter to the original adjudicating authority for re-quantification of the interest amount. Both the learned advocate and the DR concurred with this proposal. Consequently, the impugned order was set aside, and the matter was remanded for re-quantification of the interest amount on the excess cenvat credit taken and subsequently reversed by the appellants. The stay petition and appeal were disposed of accordingly.