2015 (7) TMI 226 - AT - Central Excise

CENVAT Credit - whether the appellant is entitled to Cenvat Credit in respect of furnace oil used in the manufacture of goods on job work basis and cleared without payment of duty under notification No. 214/86-CE dated 25/3/1986 - Held that - Since the present appeal has attained finality in assessee s own previous case 2010 (3) TMI 1056 - CESTAT MUMBAI - Appellant is entitled for re-credit of amount reversed by them in respect of furnace oil subject to verification of the said amount by adjudicating authority. The adjudicating authority shall ensure the correct amount of re-credit to the appellant. The appeal is allowed by way of remand only for a limited purpose i.e. verification of amount - matter remanded back - Decided in favour of assessee.

Summary

Issues:
1. Admissibility of Cenvat Credit in respect of furnace oil used in the manufacture of goods on job work basis.
2. Challenge of unjust enrichment in the context of Cenvat Credit.

Issue 1: Admissibility of Cenvat Credit:
The appeal questioned whether the appellant is entitled to Cenvat Credit for furnace oil used in manufacturing goods on a job work basis and cleared without duty payment under notification No. 214/86-CE. The appellant availed Cenvat Credit of Rs. 12,62,519 on the furnace oil, which was later reversed. The refund claim was filed based on the decision of the Commissioner (Appeals) in a previous order. The adjudicating authority rejected the claim citing a pending appeal before CESTAT Mumbai. However, the Tribunal had previously ruled in favor of the appellant's entitlement to re-credit the Cenvat amount. The issue revolved around the interpretation of rules regarding Cenvat Credit for inputs used in manufacturing exempted goods.

Issue 2: Challenge of Unjust Enrichment:
The appellant's counsel argued that the issue of unjust enrichment had been conclusively settled in previous proceedings, as the Revenue had not raised this plea in their appeals. The Commissioner (Appeals) had previously determined that the principle of unjust enrichment did not apply in this case, citing specific provisions of the Central Excise Act. The Tribunal upheld this decision, emphasizing the exception for inputs used as fuels and the absence of a requirement to reverse Cenvat Credit for such inputs. The Tribunal's Larger Bench decision further supported the appellant's entitlement to re-credit the Cenvat amount without considering unjust enrichment.

The Tribunal carefully considered the arguments presented by both parties and reviewed the records. It was established that the issue of Cenvat Credit for furnace oil in job work manufacturing had already been settled in favor of the appellant in previous proceedings. The Tribunal concluded that the appellant was entitled to re-credit the amount reversed for furnace oil, subject to verification by the adjudicating authority. The appeal was allowed for the limited purpose of verifying the correct amount for re-credit, as per the Tribunal's previous decision.