2015 (10) TMI 1139 - AT - Central Excise

CENVAT Credit - exemption under Notification No.30/2004-CE, dt.09.07.2004 - Held that - Appellant has already reversed the credit lying in their CENVAT account before issue of the Show Cause Notice - It is consistently viewed by the Tribunal that the benefit of Notification No.30/2004-CE cannot be denied on the ground that CENVAT Credit was reversed after clearance of the goods. It is noticed that in the present case, the Appellant reversed the credit. We find that the Tribunal in the case of Omkar Textiles Pvt. Ltd (2013 (10) TMI 1298 - CESTAT AHMEDABAD) held that the quantum of CENVAT Credit reversed and there is no suppression of fact with intent to evade payment of duty and the extended period of limitation cannot be attracted. - Decided in favour of assessee.

Summary

Issues:
1. Denial of benefit of exemption notification due to failure to reverse CENVAT credit.
2. Applicability of Notification No.30/2004-CE.
3. Reversal of credit before issuance of Show Cause Notice.
4. Precedents supporting reversal of CENVAT credit.

Analysis:

Issue 1: The case involved the denial of the benefit of exemption notification to the Appellant due to their failure to reverse the CENVAT credit amount when opting for Notification No.30/2004-CE.

Issue 2: The Appellants were engaged in the manufacture of specific products classifiable under Chapter 55 of the Central Tariff Act, 1985, and had opted for exemption Notification No.30/2004-CE dated 09.07.2004.

Issue 3: The Appellant had reversed the CENVAT credit amount of Rs. 1,56,885.00 before the issuance of the Show Cause Notice by the Central Excise Officers, which was crucial in determining the case.

Issue 4: The Tribunal referred to several precedents where it was established that the benefit of Notification No.30/2004-CE cannot be denied solely based on the timing of the reversal of CENVAT credit. The Tribunal emphasized that as long as the credit was reversed, the denial of benefit was unwarranted.

In the final judgment, the Tribunal noted that the Appellant had indeed reversed the credit before the Show Cause Notice was issued, aligning with the principles established in previous cases like Omkar Textile Mills Pvt. Ltd. The Tribunal concluded that the demand of duty, interest, and penalty could not be sustained, ultimately setting aside the impugned order and allowing the appeal filed by the Appellant.