2015 (10) TMI 1132 - AT - Central Excise

Denial of exemption claim - Notification No.2/2001-CE, dt.27.01.2001 and Notification No.16/2001-CE, dt.26.03.2001 - Held that - In de-novo proceedings, the Commissioner of Central Excise, accepted the reversal of credit on the inputs in respect of the clearance of the exempted goods and dropped the proceedings. This fact was not disputed by both the sides. We find that from the impugned order that the period of dispute in the present two show cause notices are covered in respect of other five show cause notices. So, it is clearly evident that the Appellant reversed the credit utilized on the inputs used in the manufacture of exempted final product. This fact was also accepted by the Department. As the period of dispute in the present case is covered in the earlier five show cause notices where the demand was dropped, the appeal filed by the Revenue in respect of said Show Cause Notices cannot be sustained. - Decided against Revenue.

Issues:
1. Demand of duty on cleared Cement under exemption notifications.
2. Demand of duty on Clinkers used in the manufacture of Cement.
3. Appeal against the confirmation of demand under Rule 6 of CENVAT Credit Rules.
4. Appeal against dropping of demand on Clinkers.
5. Verification of credit reversal amounts.
6. Final decision on the Revenue's appeal.

Analysis:

1. The Respondents were involved in manufacturing Cement and Clinkers and had cleared Cement under exemption notifications. Show Cause Notices were issued for duty demand on Cement cleared without payment. The Appellant used dutiable Clinkers as an intermediate product in manufacturing exempted Cement. The Commissioner confirmed the demand of 8% of the value of the finished product under Rule 6 of CENVAT Credit Rules, dropping the proceedings against duty on Clinkers.

2. The Assessee appealed against the demand under Rule 6 of CENVAT Credit Rules, while the Revenue appealed against the dropping of the demand on Clinkers. The Tribunal remanded the matter for verification of credit reversal amounts. The Revenue's present appeal was taken up for disposal.

3. The Respondents' Advocate submitted that the Adjudicating authority had dropped the proceedings in respect of five show cause notices as per the Tribunal's remand order. The Commissioner had accepted the reversal of credit on inputs used in manufacturing exempted goods, leading to the dropping of proceedings.

4. After considering the records, it was found that in de-novo proceedings, the Commissioner accepted the reversal of credit on inputs for exempted goods and dropped the proceedings. As the period of dispute in the present case was covered in the earlier five show cause notices where the demand was dropped, the Revenue's appeal could not be sustained.

5. The Tribunal rejected the Revenue's appeal based on the acceptance of credit reversal on inputs used in manufacturing exempted final products. The decision was made after thorough consideration of the facts and previous proceedings.

6. The judgment provided a detailed analysis of the issues related to duty demands on cleared Cement and Clinkers, appeals against the demands, verification of credit reversal amounts, and the final decision on the Revenue's appeal, ensuring a comprehensive review of the case and relevant legal provisions.

(Dictated & Pronounced in Court)

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