2019 (3) TMI 1788 - AT - Central Excise

EOU - Refund of CENVAT Credit - exempt goods or not - revised monetary limits prescribed by the CBEC vide instructions dated 11 July 2018 - HELD THAT - The duty paid by the respondent at the time of clearance to DTA was duty of excise and therefore, the goods cleared by the respondent cannot considered as exempted goods. Since, 100% EOU have been given a different treatment for levy of duty, excisability of their products has to be determined from that perspective. The statutory provisions under Rule 2(d) of the Cenvat Credit Rules, 2004 do not speak of Tariff duty but the duty of excise leviable thereon , which was undisputedly levied in the case of the respondent. Thus, even on merits, the appeal of the revenue is not sustainable. CENVAT Credit taken on the basis of photocopies - HELD THAT - The Tribunal has held in number of cases that the credit on photocopies cannot be denied, unless it is proved that they are not genuine. We further find that the Assistant Commissioner in the order-in-original has observed that the respondent had supplied some original copies - the respondent had been repeatedly taking services of a limited number of service providers and in case of any doubt, the Revenue was at liberty to verify the genuineness of the credit taken on the basis of the photocopies. Appeal dismissed - decided against appellant.

Summary

Issues:
- Admissibility of refund claims under Rule 5 of Cenvat Credit Rules, 2004
- Entitlement to Cenvat credit on input services for goods carrying nil rate of duty
- Validity of previous Tribunal order in favor of the respondent
- Nature of duty paid by 100% EOU under Section 3(1) of Central Excise Act, 2002
- Eligibility of goods cleared by respondent as exempted goods
- Acceptance of Cenvat credit on photocopies

Analysis:
1. The appeal concerns the admissibility of refund claims under Rule 5 of the Cenvat Credit Rules, 2004. The Revenue challenged the order-in-appeal allowing the respondent's refund claims based on a previous Tribunal order in favor of the respondent. The Revenue argued that revised monetary limits prevented them from appealing the previous order, necessitating a review of the issue on merits.

2. The respondent, an EOU unit, filed refund claims for unutilized Cenvat credit of service tax on input services used in manufacturing goods. The claims were rejected citing duty exemption on exported and DTA cleared goods. The Commissioner (Appeals) allowed the refunds based on the previous Tribunal order in the respondent's favor.

3. The Revenue contended that goods carrying nil duty rate are exempted, disallowing Cenvat credit on input services. The respondent argued that duty paid by EOUs under Section 3(1) of the Central Excise Act, 2002 constitutes excise duty, supported by legal precedents.

4. The Tribunal rejected the Revenue's argument, stating that denial of refunds based on inadmissible Cenvat credit should have been addressed separately. The duty paid by the respondent was deemed excise duty, not customs duty, making the goods non-exempted. The Tribunal upheld the Commissioner's decision based on legal interpretations.

5. Additionally, the Tribunal dismissed concerns regarding photocopies for Cenvat credit, emphasizing the need to prove their genuineness. The respondent's consistent service providers and the availability of original copies were considered sufficient for credit validity.

6. In conclusion, the Tribunal found no illegality in the order-in-appeal and dismissed the appeal, affirming the admissibility of the refund claims and the nature of duty paid by the respondent as excise duty, not customs duty.

Judgment Highlights:
- Tribunal upheld Commissioner's decision on refund claims based on previous Tribunal order
- Duty paid by respondent considered excise duty, making goods non-exempted
- Photocopies for Cenvat credit deemed valid, subject to genuineness verification