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2014 (10) TMI 594 - AT - Central ExciseCENVAT Credit - Credit taken on furnace oil - furnace oil used in manufacturing of job work goods which were cleared without payment of duty - Held that - As the issue has been settled by the Hon ble High Court of Bombay in the case of Sterlite Inds. 2004 (12) TMI 108 - CESTAT, MUMBAI wherein it has been held that if the job worker has taken any input credit on furnace oil which has been used in the job work goods and same has been cleared without payment of duty but the principal manufacturer has paid the duty on the final product, in that case Cenvat Credit on furnace oil is available to the job worker. - Decided against Revenue.
Issues:
- Appeal against rejection of appeal by Commissioner (Appeals) regarding Cenvat Credit on furnace oil used in job work goods. - Interpretation of the decision in Sterlite Inds. case by the Hon'ble High Court of Bombay. Analysis: - The appellant appealed against the impugned order where the Commissioner (Appeals) rejected the appeal filed by the revenue regarding the entitlement of Cenvat Credit on furnace oil used in manufacturing job work goods cleared without duty payment, but the final product incurring duty. The revenue contended that since the job worker used the furnace oil without paying duty, they are not eligible for the credit. The Adjudicating Authority dropped the show-cause notice, which was upheld by the Commissioner (Appeals) based on the Sterlite Inds. decision. The revenue challenged this decision, arguing that the High Court was reviewing the Sterlite Inds. case, making the dismissal premature. - During the hearing, it was revealed that the appeal in the Sterlite Inds. case had been dismissed by the High Court. The High Court's decision clarified that if a job worker takes input credit on furnace oil for job work goods cleared duty-free, but the principal manufacturer pays duty on the final product, the job worker is entitled to Cenvat Credit on the furnace oil. Consequently, the Tribunal found no fault in the impugned order and upheld it, leading to the dismissal of the revenue's appeal.
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