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2017 (9) TMI 500 - AT - Central ExcisePenalty u/s 14 & 15(1) of CER, 2004 - reversal of CENVAT credit - rendering of taxable as well as exempt services - N/N. 82/84 CE dated 31.03.1984 - Held that - similar issue decided in the case of DHARAMSI MORARJI CHEMICAL CO. LTD. Versus COMMR. OF C. EX., RAIGAD 2010 (3) TMI 561 - CESTAT MUMBAI , where the very same rule 6 of Cenvat Credit Rules was invoked, where the Bench has held that the provisions of Rules are not attracted in case in hand where CT-3 certificate has been issued - credit allowed - appeal allowed - decided in favor of appellant.
Issues:
Penalty under sections 14 & 15(1) of Cenvat Credit Rules, 2004; Compliance with Notification No. 82/84 CE; Reversal of amount under Notification No. 82/84; Applicability of Rule 6 of Cenvat Credit Rules, 2004. Penalty under sections 14 & 15(1) of Cenvat Credit Rules, 2004: The appellant was penalized under sections 14 & 15(1) of Cenvat Credit Rules, 2004 by the Revenue. The first appellate authority rejected the appellant's contentions and upheld the penalties imposed, confirming the demand with interest. The issue revolved around the legality of the penalties imposed on the appellant. Compliance with Notification No. 82/84 CE: The appellant argued that the clearances made to purchasers were under Notification No. 82/84 CE, which required compliance with the procedures laid down in the Central Excise Rules. The appellant contended that they had followed the required procedures and cleared goods after receiving certificates from purchasers, asserting that these cleared products should not be considered exempted goods. Reversal of amount under Notification No. 82/84: The Revenue argued that the clearances by the appellant under Notification No. 82/84 were subject to conditions requiring the reversal of 8% or 10% of the value of goods cleared. The dispute centered on whether the appellant had to reverse the Cenvat Credit of common input services for goods cleared under the said notification. Applicability of Rule 6 of Cenvat Credit Rules, 2004: The core issue was whether the appellant was required to reverse 8% or 10% of the value of goods cleared under Notification No. 82/84, as mandated by Rule 6 of Cenvat Credit Rules, 2004. The appellant argued that the Rule was not applicable to their case, citing precedents and decisions by the Tribunal and High Courts to support their stance. The Tribunal analyzed the arguments presented by both sides and referred to previous decisions to reach a conclusion. The Tribunal found that the appellant, in this case, was not required to reverse the amount under Rule 6 of Cenvat Credit Rules, 2004. It was established that the goods cleared under Notification No. 82/84 were not exempted products, and therefore, the Rule did not apply. The Tribunal's decision was supported by previous judgments and upheld by the High Court. Consequently, the impugned order confirming the demand and penalties was set aside, and the appeal was allowed.
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