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2015 (10) TMI 710 - HC - Central ExciseCENVAT Credit - Whether credit of duty is admissible to the inputs in the present case in terms of erstwhile Rule 57C & 57CC, used in exempted goods when the inputs (IC engine below 1800 cc) are not common with those used in the dutiable products, when an amount of 8% of the price of exempted product has been paid and when no separate account has been maintained in respect of the exempted goods - Held that - appellant does not dispute and fairly states that the substantial questions of law raised and involved in these appeals are squarely covered by the judgment of the High Court of Punjab and Haryana in Escort Limited case (2004 (8) TMI 216 - CESTAT, NEW DELHI). She did not make any attempt to either distinguish the judgment of the High Court of Punjab and Haryana or to persuade us to take a view other than the one taken by that High Court. She only submits that the judgment of the High Court of Punjab and Haryana is carried by the Department to the Supreme Court in SLP No.556 of 2011 and the matter is now pending there for adjudication. - Petition disposed of.
Issues:
1. Interpretation of Rule 57 CC (1) of the Central Excise Rules, 1944 regarding availing modvat credit. 2. Admissibility of duty credit for inputs used in exempted goods. 3. Maintenance of separate account for exempted goods. 4. Applicability of judgments by High Court of Punjab and Haryana and CESTAT. Interpretation of Rule 57 CC (1) - The central issue in this case revolved around the interpretation of Rule 57 CC (1) of the Central Excise Rules, 1944, concerning the availability of modvat credit. The appeals arose from orders passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) based on judgments in previous cases. The key question was whether the respondents could avail modvat credit after paying 8% of the price for exempted final products. The High Court of Punjab and Haryana had previously addressed a similar issue and ruled in favor of the assessee, confirming the CESTAT's decision. Admissibility of Duty Credit for Inputs - The Court considered whether duty credit was admissible for inputs used in exempted goods, particularly when the inputs were not common with those used in dutiable products. The case highlighted the importance of maintaining a separate account for exempted goods. The judgment of the High Court of Punjab and Haryana in a related case supported the position that duty credit could be claimed under specific circumstances, as evidenced by the ruling in the Escort Limited case. Applicability of Judgments - The judgment underscored the significance of precedent set by the High Court of Punjab and Haryana and decisions made by the CESTAT in similar cases. The appellant did not contest the alignment of the substantial legal questions raised in this case with the rulings of the High Court of Punjab and Haryana. The matter was noted to be pending before the Supreme Court for further adjudication, indicating the potential for future legal developments based on the Supreme Court's decision. Conclusion - In light of the existing legal framework and the pending appeal before the Supreme Court, the Court disposed of the appeals with the provision for revival pending the outcome of the Supreme Court's decision. The parties were granted the opportunity to argue the appeals afresh on merits if the challenge to the High Court of Punjab and Haryana's judgment was upheld. The disposal of miscellaneous petitions was also addressed, with no order as to costs being issued.
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