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2018 (2) TMI 1108 - AT - Central ExciseDeposit of Excise Duty with Central Government - Section 11D of the Central Excise Act, 1944 - CENVAT credit on intermediate goods - Held that -issue decided in appellant own case M/s Lamicoat International Pvt. Ltd., Shri Lok Nath Prasad Gupta, Director, Shri Om Prakash Gupta, Director, Shri Dipankar Ghosh, Manager Versus Commissioner of Central Excise, Noida 2015 (9) TMI 679 - CESTAT NEW DELHI , where it was held that as the appellant has paid duty on their final product therefore the said amount cannot be recovered twice under section 11D of the act. Further, As appellant is discharging duty on final product therefore although same is exempt, the demands are not sustainable. Appeal allowed - decided in favor of appellant.
Issues involved:
1. Duty demand confirmed under section 11D of Central Excise Act, 1944 on intermediate product. 2. Denial of credit on inputs due to exempt final product. 3. Applicability of Section 11D regarding duty payment and Cenvat credit utilization. 4. Demand confirmation on captively consumed polythene film. Analysis: Issue 1: Duty demand under section 11D on intermediate product The appellant, engaged in manufacturing Printed Laminated Polyester film and Metalised Polyester films, faced a demand of duty confirmed under section 11D of the Central Excise Act, 1944. The demand was related to an intermediate product emerging during the manufacturing process of their final product, which was exempt from duty payment. The Tribunal noted the appellant's collection of a specific sum from customers, which was required to be deposited in accordance with Section 11D. Additionally, penalties were imposed, and credits taken on inputs were held to be reversed due to the exempt status of the final product. The Tribunal emphasized the necessity for duty payment on the intermediate product, even though the final product was exempt, as per Notification No. 67/95. Issue 2: Denial of credit on inputs due to exempt final product The Tribunal highlighted that since the final product was not dutiable, the appellant was required to pay duty on specific products, leading to the denial of credit on inputs such as laminated rolls and metalized polythene film. The appellant's use of granules to manufacture polythene films, subsequently utilized for the laminated polyester films on which duty was paid, resulted in the exempt status of the final product, thus impacting the credit availability on inputs. Issue 3: Applicability of Section 11D regarding duty payment and Cenvat credit utilization The Tribunal referenced the appellant's argument based on a previous Tribunal decision in their favor, emphasizing that duty payment on the final product precludes double recovery under Section 11D. The Tribunal analyzed the provisions of Section 11D, emphasizing the requirement for persons liable to pay duty to deposit any excess amount collected from buyers. It was concluded that since the appellant had already paid the collected amount as duty to the Central Government, the demand under Section 11D was deemed unsustainable. Issue 4: Demand confirmation on captively consumed polythene film Regarding the demand confirmation on captively consumed polythene film, the Tribunal ruled in favor of the appellant, highlighting that duty payment on the final product sufficed as payment for captively consumed goods. The demand related to the polythene film was set aside, considering the duty payment on the final product and the non-manufacturing status of the final goods. In conclusion, the Tribunal set aside the impugned order, allowing the appeal with consequential relief based on the favorable decisions on duty payment, credit denial, and demand confirmation issues.
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