2022 (3) TMI 1523 - HC - Central Excise

Reversal of CENVAT Credit - common input, i.e., furnace oil used in the manufacture of exempted goods - HELD THAT - There are no error of law in the impugned order. That apart, the impugned order of the Tribunal is based on findings of fact. Appeal of Revenue dismissed.

Summary

Issues:
Appeals under Section 35-G of the Central Excise Act, 1944 against the Tribunal's order regarding the reversal of CENVAT credit for raw materials used in manufacturing exempted and non-exempted goods.

Analysis:
The judgment by the High Court of Allahabad pertains to two appeals filed under Section 35-G of the Central Excise Act, 1944 against a common order of the Tribunal dated 05.11.2021. The main issue in contention is the reversal of CENVAT credit concerning raw materials utilized in the production of both exempted and non-exempted goods. It is highlighted that the respondent-assessee maintained separate accounts for raw materials, except for furnace oil, which was used for generating steam and was commonly utilized. The reversal of CENVAT credit related to this common input, i.e., furnace oil used in manufacturing exempted goods, is the subject of dispute.

The High Court examined the impugned order, specifically focusing on paragraphs 24 to 36, and concluded that there was no error of law present in the Tribunal's decision. The judgment emphasizes that the Tribunal's order is founded on factual findings. Consequently, the Court determined that no substantial question of law arises in the appeals and, therefore, dismissed them.

In summary, the High Court upheld the Tribunal's decision regarding the reversal of CENVAT credit for raw materials used in manufacturing both exempted and non-exempted goods. The judgment underscores the importance of maintaining separate accounts for raw materials and addresses the controversy surrounding the reversal of CENVAT credit for furnace oil, a common input utilized in the production of exempted goods. The Court's analysis focused on the absence of legal errors in the Tribunal's order and the factual basis of the decision, leading to the dismissal of the appeals due to the lack of substantial legal questions.