2013 (5) TMI 624 - AT - Central Excise

Admissibility of Cenvat credit - Common inputs used in manufacture of exempted as well as dutiable goods - Held that - Issue in this appeal is related to whether the applicant manufactured the exempted goods during the period in dispute from the non cenvatable inputs as per the remand order passed by the Tribunal. Observing the finding given by the Commissioner (Appeals) in the present order reproduced as I further observe that the adjudicating authority has verified the documents only in compliance with the Hon ble CESTAT s order dated 20.10.08 and confirmed that the ADV wheel rims and harvester combine rims were manufactured from the non-cenvatable stocks of inputs. Following the same the present demand is not sustainable and hence set aside.

Summary

Issues:
- Whether the appellant is liable to pay 8% of the sale price of exempted goods under Rule 57AD of the Central Excise Rules.
- Whether the appellant manufactured exempted goods from non-cenvatable inputs during the disputed period.

Analysis:

1. The appellant appealed against the Commissioner (Appeals)'s order, claiming exemption from paying duty for manufacturing wheel rims for harvester and animal-driven vehicles. The issue arose as the appellant availed credit for common inputs used in manufacturing both exempted and dutiable goods. The contention was that the appellant previously maintained separate records for inputs but opted not to from 1.4.2000. The Tribunal remanded the case to verify if exempted goods were made from inputs without credit. The Commissioner (Appeals) confirmed that rims for both vehicles were made from non-cenvatable inputs but dismissed the appeal citing a lack of provision for verifying inputs under Rule 57D.

2. The appellant argued that since exempted goods were made from non-cenvatable inputs, the demand was unjustified. The Revenue supported the lower authority's decision based on Rule 57AD, stating that due to the lack of separate records post-1.4.2000, the appellant must pay 8% of the sale price of exempted goods. The central issue was whether the appellant manufactured exempted goods from non-cenvatable inputs during the disputed period, as per the Tribunal's remand order.

3. The Commissioner (Appeals) specifically found that the exempted goods were indeed made from non-cenvatable inputs, leading to the unsustainability of the demand. The judgment set aside the demand but subject to principles of unjust enrichment for any potential refund. The decision was made after verifying documents in compliance with the Tribunal's order, ultimately disposing of the appeal in favor of the appellant.

This detailed analysis of the judgment highlights the key legal issues, arguments presented by both parties, and the final decision rendered by the Tribunal.