2016 (8) TMI 750 - AT - Central Excise

Cenvat credit - 100% EOU clears the goods to the appellant on payment of duty in terms of Notification No. 23/2003-CE dated 31.03.2003 - appellant availed credit of duties paid by the 100% EOU - Held that - the issue whether the appellant is entitled to avail credit of the education cess and special additional duty is settled in favour of the appellant by the decisions of this Tribunal in the case of Emcure Pharmaceuticals Ltd. V. CCE, Pune 2008 (1) TMI 147 - CESTAT, MUMBAI wherein the Tribunal allowed the appeal of the assessee by holding that the respondent can avail the cenvat credit of education cess of the goods supplied to them by 100% EOU and the restriction imposed under Rule 3(7)(a) is not applicable. Similar view is fortified by the decision of the Tribunal in the case of Shreya Pets Pvt. Ltd. Vs. CCE, Hyderabad IV reported in 2008 (9) TMI 351 - CESTAT, Bangalore wherein the Tribunal by following the decision of Emcure Pharmaceuticals (supra) has held that the assessee is entitled to avail 100% credit of education cess on the goods supplied to them by a 100% EOU. The decision in the case of Emcure Pharmaceuticals was also followed by the Tribunal in the case of CCE, Daman Vs. PVN Fabrics 2012 (10) TMI 870 - CESTAT, AHMEDABAD as also in the case of Jai Corporation Ltd. Vs. CCE, Vapi 2014 (11) TMI 706 - CESTAT AHMEDABAD . Further it is found that on identical issue for the earlier period, in the appellant s own case, this Tribunal allowed the appeal relying on the decisions of the Tribunal cited supra. Therefore, by following the precedent in the above cases, the impugned order is set aside. - Decided in favour of appellant

Summary

Issues:
- Appeal against Order-in-Appeal rejecting cenvat credit demand
- Availing cenvat credit on duty paid on inputs from 100% Export Oriented unit
- Show-cause notice for recovery of cenvat credit availed
- Confirmation of demand, interest, and penalty by Assistant Commissioner
- Appeal before Commissioner (Appeals) rejecting the appeal
- Appellant challenging impugned order before the Tribunal
- Interpretation of Rule 3(7) of Cenvat Credit Rules 2004
- Entitlement to avail credit of education cess and special additional duty
- Precedents supporting appellant's entitlement to cenvat credit

Analysis:

The case involved an appeal against the Order-in-Appeal rejecting the appellant's cenvat credit demand. The appellants, engaged in manufacturing various products falling under specific chapters of the Central Excise Tariff Act, availed cenvat credit on duty paid on inputs procured from a 100% Export Oriented unit. The dispute arose when a show-cause notice was issued proposing to demand and recover the cenvat credit availed during a specific period under relevant sections of the Central Excise Act and Rules. The Assistant Commissioner confirmed the demand with interest and penalty, leading to the appellant filing an appeal before the Commissioner (Appeals), who upheld the order. Subsequently, the appellant approached the Tribunal challenging the impugned order.

During the proceedings, the appellant argued that the impugned order failed to appreciate the factual and legal position, particularly regarding the interpretation of Rule 3(7) of the Cenvat Credit Rules 2004. The appellant contended that they were entitled to avail credit of education cess and special additional duty, citing precedents supporting their position. The appellant relied on decisions of the Tribunal in various cases, including Emcure Pharmaceuticals Ltd. v. CCE, Pune, Shreya Pets Pvt. Ltd. v. CCE, Hyderabad IV, CCE, Daman v. PVN Fabrics, and Jai Corporation Ltd. v. CCE, Vapi, where it was held that the appellant could avail cenvat credit of education cess on goods supplied by a 100% EOU.

Considering the arguments and precedents cited, the Tribunal, per the judgment delivered by Shri S. S. Garg, Judicial Member, allowed the appeal of the appellant. The Tribunal set aside the impugned order, providing consequential relief to the appellant. The decision was based on the consistent interpretation of the law and precedents supporting the appellant's entitlement to cenvat credit of education cess and special additional duty. The judgment emphasized the importance of legal clarity and adherence to established legal principles in resolving disputes related to cenvat credit availing.