2017 (1) TMI 224 - AT - Central Excise

Refund - Cenvat credit on capital goods - clause -2B of N No. 32/99-CE - Rule- 4 (2) (b) of the CCR 2004 - Held that - So for as preliminary objection of the Learned AR, regarding filing of two appeal is concerned, it is observed that Com (A) has given only one order No. 38/GHY/CE(A)/GHY/2014 to OIA dt 21/2/14 when two OIA order-in-original number were required to be given when two order-in-originals were being decided. So for as the issue of cash refund of EC & S&H EC is concerned Com (A) in Para-14 of OIA dt 21/2/14 has relied upon the case laws of this bench where the same issue has been decided in favour of the Revenue. In the case of VMI Industries Vs. CCE Jamu 2013 (12) TMI 695 - CESTAT NEW DELHI (LB) the same issue with respect to area based exemption Notification No. 56/2002-CE dt 14/11/2002 has been decided by CESTAT Delhi by majority in a difference of opinion situation. Regarding taking of balance 50% Cenvat Credit on the capital goods in April 2012 it is observed that Rule 4 (2) (b) of Cenvat Credit Rules 2004 (CCR) does not mandate appellant to take credit compulsorily in the month of April of the next financial year - As the entire exercise is revenue neutral appeal of the appellant to the extent is allowed by setting aside recovery made by the Adjudicating authority on this account - Appeal partly allowed.

Summary

Issues:
1. Correct timing of Cenvat Credit on capital goods.
2. Cash refund of Education Cess & S&H Education Cess.

Analysis:
1. The appellant filed an appeal against the rejection of appeals by the first appellate authority regarding the timing of taking 50% Cenvat Credit on capital goods. The appellant argued that the Credit was correctly taken as per Rule- 4 (2) (b) of the Cenvat Credit Rule 2004, which does not mandate taking the balance credit in April of the next financial year. The Revenue contended that the Credit was available in April 2012 and should have been taken then to determine the correct cash refund. The Tribunal observed that even if the Credit was taken in April 2012, the appellant would still be entitled to higher refunds during the relevant months. As the exercise was revenue neutral, the recovery made by the Adjudicating authority was set aside, and the appeal was allowed on this issue.

2. The second issue pertained to the cash refund of Education Cess & S&H Education Cess. The Revenue argued that the cash refund was not admissible as per the provisions of Notification No. 32/99-CE and relied on precedents where similar issues were decided in favor of the Revenue. The Tribunal upheld the rejection of the appeal regarding the cash refund of Education Cess & S&H Education Cess, citing previous decisions in favor of the Revenue. The appeal was allowed only to the extent indicated in the judgment, with consequential relief, if any.

In conclusion, the Tribunal allowed the appeal on the issue of the correct timing of Cenvat Credit on capital goods, setting aside the recovery made by the Adjudicating authority. However, the appeal was rejected concerning the cash refund of Education Cess & S&H Education Cess, in line with previous decisions favoring the Revenue.