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2018 (3) TMI 405 - AT - Central ExciseCENVAT credit - common inputs/input services for taxable as well as exempt goods - demand of an amount equivalent to 8% or 10% of the value of the exempted goods - Held that - the Adjudicating Authority has diligently gone through the entire case records and held in favour of respondent with which we concur - We find no reason to interfere in such a reasoned order given by the Adjudicating Authority as Revenue has not contradicted the findings effectively and hold that the impugned order is correct and legal and does not require any interference - appeal dismissed - decided against Revenue.
Issues:
Demand of 8% or 10% of the value of exempted goods, Reversal of CENVAT credit, Denial of CENVAT Credit for inputs used in R&D section, Payment of amount at 8% or 10% on finished goods. Analysis: The appeal before the Appellate Tribunal CESTAT Hyderabad concerned the Revenue's challenge against Order-in-Original No. 01/2008 CE dated 18.03.2008. The central issue revolved around the demand of an amount equivalent to 8% or 10% of the value of exempted goods cleared by the appellant, who had taken CENVAT credit on common inputs and input services. Upon hearing both sides and examining the records, the Tribunal found no merits in the Revenue's case. The Adjudicating Authority had meticulously analyzed the situation in Paragraph No. 21, 22, 23, and 26 of the impugned order, addressing various aspects of the demand and credit reversals. Regarding the reversal of CENVAT credit and proportionate reversal of credit, the Tribunal upheld the findings of the Adjudicating Authority. The appellant had voluntarily paid the required amounts upon detection of discrepancies, and the Tribunal found no grounds to overturn these decisions. The Tribunal also delved into the contentious issue of denial of CENVAT Credit for inputs used in the R&D section. The Adjudicating Authority's detailed analysis, along with legal interpretations and precedents cited, led the Tribunal to conclude that the inputs used in trial stages of production should be considered as used in relation to the manufacture of finished goods, thus rejecting the denial of CENVAT credit. Furthermore, the issue of the payment of 8% or 10% of a specific amount on finished goods was scrutinized. The Tribunal observed that the statistical analysis conducted by the Department to arrive at the demand was effectively countered by the appellant. Discrepancies in the clearance value, consumption of inputs, and other factors highlighted by the appellant led the Tribunal to rule that the demand of the specified amount was not sustainable. The Tribunal concurred with the Adjudicating Authority's reasoned order, noting the lack of effective contradiction by the Revenue, and upheld the decision in favor of the respondent. Consequently, the appeal was rejected, affirming the correctness and legality of the impugned order. In conclusion, the judgment by the Appellate Tribunal CESTAT Hyderabad comprehensively addressed the issues raised by the Revenue, meticulously examining the factual and legal aspects of the case to arrive at a well-reasoned decision in favor of the respondent. The detailed analysis of each issue, coupled with legal interpretations and precedents, ensured a thorough and just adjudication of the matter.
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