2015 (10) TMI 1344 - AT - Central Excise

Refund claim - Eligibility of CENVAT Credit - Duty paid under protest - Held that - Commissioner (Appeals) observed that the Adjudicating Authority adjusted this amount on the consent of the appellant, and therefore, the appeal of the appellant cannot be accepted. In Appeal No. E/1544/2010, it is observed by the Commissioner (Appeals) that the appellants had not contested the demand of ₹ 6,99,436.00/-. I find that the appellant contested the demand of the said amount by filing the refund claim. The appellant contended that the Larger Bench of the Tribunal in the case of H.M.T. (2008 (10) TMI 54 - CESTAT, NEW DELHI) held that when the input credit legally taken and utilized on the duty of final product need not be reversed on the final product becoming exemption subsequently. In my considered view, it is required to examine the facts of the case in respect of applicability of the Larger Bench decision. - impugned order is set-aside except refund amount of ₹ 7,496.00/- as already allowed. - Decided partly in favour of assessee.

Summary

Issues:
Dispute of classification and exemption notification, adjustment of duty paid under protest, eligibility of Cenvat Credit, rejection of refund claim, interest claim, remand to Adjudicating Authority.

Dispute of Classification and Exemption Notification:
The appellant, engaged in manufacturing, faced a dispute regarding classification and exemption notification. They paid duty under protest, leading to a refund claim. The Assistant Commissioner informed them to pay a specific amount on inputs and finished goods for opting exemption. The appellant consented to adjust this amount against the refund. The Assistant Commissioner granted the cash refund and appropriated an amount against outstanding dues. The appellant appealed against the adjustment order, which was rejected by the Commissioner (Appeals).

Eligibility of Cenvat Credit:
The core issue revolved around the eligibility of Cenvat Credit availed by the appellant on the stock of inputs used for duty payment on the final product. The appellant argued they utilized the credit for duty payment, with a nil balance on the Cenvat account on a specific date. They cited a Tribunal decision supporting their stance. The Tribunal found it necessary to examine the facts to determine the applicability of the cited decision and remanded the matter to the Adjudicating Authority for a fresh decision.

Rejection of Refund Claim and Interest Claim:
The appellant filed a refund claim for an amount erroneously paid and interest on duty paid under protest. The Adjudicating Authority rejected the refund claim and interest but sanctioned a different refund amount. The Commissioner (Appeals) rejected the appeal against this decision. The Tribunal noted discrepancies in the Commissioner's observations and remanded the matter to the Adjudicating Authority for a fresh decision, emphasizing the need to consider both cases' submissions.

Remand to Adjudicating Authority:
The Tribunal set aside the impugned order, except for a specific refund amount already allowed. The matters were remanded to the Adjudicating Authority for a comprehensive review based on facts and applicable laws, including the interest claim. The Tribunal clarified that its order did not express any view on the case's merits, leaving the final decision to the Adjudicating Authority.