2019 (4) TMI 1874 - AT - Central Excise

Re-credit of duty reversed earlier under protest - Grant of production subsidy - fulfilment of export obligation - sugar factories to export minimum indicative quota - re-credit sought on the ground that the appellant was not having the requested papers - HELD THAT - There was no objection by the Revenue at the time of availment of original credit, which objection cannot be raised at the time of re-credit. As such, there are no justifiable reasons to entertain the present appeal of the Revenue. Otherwise also the Commissioner(Appeals) has discussed the merits of the case and has observed that Department of Food Public Distribution (Govt. of India) vide Notification F.No.1(10)2015-SP-1 dated 18.09.2015, has stated that the quotas shall be tradable among sugar factories on mutually agreeable terms and condition and further states of a bi-partite/tri-partite agreement between/amongst quota holder sugar factory (which in this case is the appellant), Merchant Exporter (which in this case is ISEC) and the source sugar factory, i.e. from where the sugar had been sourced for export. Thus, the notification provided for sourcing of sugar from other sugar factories and therefore, such procurement was done to fulfil the export obligation. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Re-credit of Cenvat credit under Rule 4(7) of Cenvat Credit Rules 2004.
2. Eligibility of services provided by ISEC for availing Cenvat credit.
3. Dispute regarding export obligation fulfillment and production subsidy.

Analysis:
1. The dispute in the appeal revolved around the re-credit of duty reversed earlier under protest due to lack of payment proof. The Revenue's appeal was dismissed as there was no objection raised during the initial credit availing process, preventing objections at the re-credit stage. The Tribunal found no justifiable reasons to entertain the Revenue's appeal.

2. The services provided by ISEC were crucial for fulfilling the export obligation and obtaining the production subsidy. The appellate authority allowed the appeal on the grounds that the services were related to the final product of the appellant. The invoices clearly indicated the purpose of the services, emphasizing the connection to the manufacture of the final products. The Tribunal upheld the appellate authority's decision, highlighting the importance of the services in meeting export obligations and facilitating the export of sugar sourced from other factories.

3. The Commissioner(Appeals) thoroughly examined the case and found that the services procured from ISEC were directly linked to fulfilling export obligations and ultimately exporting sugar. The Tribunal agreed with the Commissioner's findings, noting that the services were utilized to meet the export quota requirements and ensure the receipt of production subsidy. The Tribunal emphasized the provisions allowing sugar sourcing from other factories to fulfill export obligations, reinforcing the legitimacy of the services provided by ISEC in aiding the appellant's export activities.

In conclusion, the Tribunal upheld the decision of the Commissioner(Appeals) and rejected the Revenue's appeal, affirming the eligibility of the services provided by ISEC for availing Cenvat credit and emphasizing their role in meeting export obligations and securing production subsidies.