2018 (12) TMI 1983 - AT - Central Excise

Rejection of refund on account of education and higher education cess - denial of Cenvat on account of value addition - denial of Cenvat credit on the input procured from EOU. Rejection of refund on account of education and higher education cess - HELD THAT - This issue is settled by Hon ble Supreme Court in the case of M/S. SRD NUTRIENTS PRIVATE LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE GUWAHATI 2017 (11) TMI 655 - SUPREME COURT which has subsequently followed by various decisions where it was held that The appellants were entitled to refund of Education Cess and Higher Education Cess which was paid along with excise duty once the excise duty itself was exempted from levy. Following the aforesaid judgement, the order passed by the ld. Commissioner (Appeals) is not sustainable in law. Denial of Cenvat credit on the input procured from the EOU - HELD THAT - This issue also stands settled in favour of appellant following the decision of coordinate bench of this Tribunal in the case of M/S METACLAD INDUSTRIES VERSUS CCE, MUMBAI-II 2012 (11) TMI 244 - CESTAT MUMBAI where it was held that Under sub-section (1), an additional duty of customs is levied which is equal to the excise duty levied on like articles produced in India. Under sub-section (5), another additional duty of customs is levied at a rate not exceeding four per cent of the value of the imported article so as to counterbalance the sales tax/value added tax or any other charges on a like article on its sale, purchase or transportation in India. Both the levies are additional duty of customs and therefore, there is no warrant to restrict the scope of the term additional duty of customs occurring in the formula to only the additional duty leviable under sub-section (1) of section 3 and not to the additional duty leviable under sub section (5) thereof. Rejection of refund claim on account of education cess and higher education cess - rejection of refund on value addition - HELD THAT - The case of value addition is covered by the judgement of M/S RECKITT BENCKISER VERSUS UNION OF INDIA AND OTHERS 2010 (12) TMI 237 - JAMMU AND KASHMIR HIGH COURT where it was held that Notification no. 19/2008 CE dated 27-3-2008 shall stand quashed. The petitioner-units shall continue to avail the benefit of exemption from payment of excise duty as provided in terms of the notification No.56/2002-CE dt. 14th of Nov 02. The respondent-State, however, shall be at liberty to take appropriate action in .accordance with the relevant rules against those unscrupulous manufacturers who are involved in illegal activities of alleged bogus production - This issue is also stands settled in favour of the appellant. The order passed by the ld. Commissioner (Appeals) is not sustainable and, therefore the impugned order set aside - appeal allowed.

Summary

Issues involved:
- Rejection of refund on account of education and higher education cess
- Denial of Cenvat on account of value addition
- Denial of Cenvat credit on the input procured from EOU

Analysis:

Rejection of refund on account of education and higher education cess:
The appeals were filed against the Order-in-Appeal upholding the lower adjudicating authority's decision. The issues revolved around the rejection of refund on education and higher education cess. The Tribunal noted that these issues had been settled in favor of the appellant by various decisions of the Tribunal and the High Court of J&K. Citing relevant cases, including SRD Nutrients Pvt. Ltd. Vs. CCE, Guwahati, the Tribunal found the order of the Commissioner (Appeals) unsustainable in law. Consequently, the Tribunal set aside the impugned order.

Denial of Cenvat on account of value addition:
Another issue in the appeals was the denial of Cenvat credit on the input procured from EOU. The Tribunal observed that this issue had been settled in favor of the appellant based on previous decisions. Referring to cases such as Metaclad Industries Vs. CCE, Mumbai-II and Micro Labs Pvt. Ltd. Vs. CCE & ST, Bangalore, the Tribunal concluded that the denial of Cenvat credit was not justified. Therefore, the Tribunal set aside the impugned order with consequential benefits.

Denial of Cenvat credit on the input procured from EOU:
The appeals also addressed the denial of Cenvat credit on inputs procured from EOU. The Tribunal found that this issue had been resolved in favor of the appellant, citing relevant judgments and final orders. Notably, the Tribunal mentioned that the decision of the Hon'ble J&K High Court and previous Tribunal orders supported the appellant's position. Consequently, the Tribunal set aside the impugned order, providing consequential benefits as per the law.

In conclusion, the Tribunal found the orders passed by the Commissioner (Appeals) unsustainable in law for all the issues raised in the appeals. By relying on established legal precedents and previous decisions, the Tribunal ruled in favor of the appellant, setting aside the impugned orders and granting consequential benefits.