2015 (4) TMI 959 - AT - Central Excise

Cenvat Credit - Utilization of Cenvat Credit lying unutilized in their Cenvat Credit credit availed when goods were dutiable - later goods were exempted - after sometime (about 8 years) exemption was withdrawn - Held that - The contention of the Ld. AR is that in the clearance of May 2004 the inputs were not same which was used in clearance of May 2004. Therefore, Cenvat Credit cannot be utilized is not acceptable at all as if anybody has procured input for say in the month of April and availed Cenvat Credit thereon. Thereafter, the said inputs are lying in their factory but inputs which were procured in the month of March have been used for the manufacturing of final product and same product has been cleared in the month of April itself, is the contention of the Ld. AR is accepted then the Cenvat Credit is not available for payment of duty by the assessee. This is not the scheme of the Government for availment of Cenvat Credit. Therefore, the argument is not acceptable. Further, I find that the issue whether the Cenvat Credit lying unutilized as on 22.07.1996 when the Vanaspati Oil was exempted from duty can be utilized for the payment of duty on Vanaspati Oil in the month of May 2004 when the duty was introduced is entitled or not, has examined by the Hon ble High Court of Calcutta in the case of Rasoi Ltd. 2004 (6) TMI 46 - HIGH COURT AT CALCUTTA in positive manner. Also the facts of case of Agarwal Industries Pvt. Ltd. 2005 (8) TMI 662 - CESTAT BANGALORE are identical to this case. Therefore, relying on the various decisions cited by the Ld. Counsel particularly in the case of Agarwal Industries Pvt. Ltd. 2005 (8) TMI 662 - CESTAT BANGALORE , I hold that appellant has correctly utilized Cenvat Credit lying unutilized as on 22.07.1996 for the clearance of May 2004. - Decided in favour of appellant.

Summary

Issues:
- Utilization of Cenvat Credit lying unutilized as on 22.07.1996 for payment of duty in May 2004.
- Interpretation of relevant notifications and conditions for Cenvat Credit utilization.

Analysis:

Issue 1: Utilization of Cenvat Credit
The appellant appealed against an order confirming a demand of Rs. 23,51,326/- along with interest and penalty of Rs. 38,86,099/-. The appellant, a manufacturer of Vanaspati Oil, had availed Cenvat Credit on inputs paying duty on their clearance. When Vanaspati Oil was declared exempted on 22.07.1996, the appellant was not required to pay duty on its clearance. Subsequently, in 2003, duty on Vanaspati Oil was reintroduced, and the appellant utilized the unutilized Cenvat Credit for duty payment in May 2004. The appellant reversed a portion of the credit in 2004 upon realizing the lack of relevant documents. A show cause notice was issued in 2005, leading to the demand of duty, interest, and penalty. The appellant contended that they were entitled to utilize the unutilized Cenvat Credit as per relevant case laws and tribunal decisions, citing the High Court of Calcutta and the Supreme Court's rulings.

Issue 2: Interpretation of Notifications
The appellant argued that they were entitled to use the Cenvat Credit as on 22.07.1996 for the clearance of May 2004, based on legal precedents. The respondent opposed, citing notification conditions and the dissimilarity of inputs used in May 2004 clearance. The Tribunal rejected the respondent's argument, emphasizing that the scheme does not restrict credit based on the specific inputs used for clearance. Referring to the High Court of Calcutta's decision in a similar case, the Tribunal held that the appellant correctly utilized the Cenvat Credit. Additionally, a previous Tribunal case supported the appellant's position, emphasizing the preservation of accrued rights even after notification rescission.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal with any consequential relief. The judgment highlighted the appellant's entitlement to utilize the unutilized Cenvat Credit for the clearance of May 2004, based on legal principles and relevant case laws.