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2019 (4) TMI 1065 - AT - Central ExciseCENVAT Credit - benefit of N/N. 30/2004-CE dated 09.07.2004 availed - case of the Department is that since they have cleared the consignment availing full exemption under Notification No. 30/2004-CE, they are not entitled to avail Cenvat credit in respect of stock lying on 31.03.2006 - HELD THAT - The appellant adopted the mechanism as clarified by the CBEC between 01/04/2006 till 01/02/2007. It is submitted that following the procedure laid down by the Circular dated 1/2/2007 of their own account, debited Cenvat Credit amount the ₹ 103,45,517/- along with interest of ₹ 95,802/- (total amount of ₹ 1,04,41319) for the closing stock as on 31/01/2007 and the said entry was made on 31/3/2007 as the appellant has started the proportionate availment of Credit at the end of the month in view of the aforesaid board Circular. The learned Adjudicating Authority denied the aforesaid credit and confirmed the demand, without appreciating the fact that the method of taking proportionate credit at the end of the month was true. The appellant has provided the detailed worksheet regarding the availment of the credit certified by the Chartered Accountant which was not accepted by the Adjudicating Authority. In this case, we are of the view that Chartered Accountant certificate cannot be disagreed without any valid reasons. The acceptance of CA Certificate has been upheld by this Tribunal and the higher courts in a large number of decisions, and therefore, the Commissioner again to ignored the same is prior to the provisions of law. The Adjudicating Authority is bound to follow the departmental Circular which is not there in case at hand. Appeal allowed - decided in favor of appellant.
Issues:
- Availment of Cenvat Credit under Notification No. 29/2004-CE and Notification No. 30/2004-CE - Reversal of credit for exempted consignments - Compliance with Circulars issued by CBEC - Acceptance of Chartered Accountant certificate Analysis: 1. Availment of Cenvat Credit under Notifications: The issue in this case revolves around the appellant's availment of Cenvat Credit on inputs used in the manufacture of finished goods under Notification No. 29/2004-CE and Notification No. 30/2004-CE. The appellant argued that they followed different procedures based on Circulars issued by CBEC. They claimed that they availed credit only on inputs consumed in the manufacture of dutiable products, not exempted goods, and reversed the credit accordingly. 2. Reversal of Credit for Exempted Consignments: The Department contended that since the appellants cleared consignments under full exemption, they were not entitled to avail Cenvat Credit for stock on hand as of 31.03.2006. The appellant, however, maintained that they reversed the credit for exempted clearances as required and were entitled to credit for stock on hand based on the prescribed procedures. 3. Compliance with CBEC Circulars: The appellant changed their methodology for availing Cenvat Credit based on Circulars issued by CBEC, specifically Circular No. 845/3/07-CX and Circular No. 858/16/07-CX. These circulars clarified the procedure for availing proportionate credit and reversing credit for exempted goods. The appellant argued that they followed the procedures outlined in the Circulars, which the Adjudicating Authority failed to appreciate. 4. Acceptance of Chartered Accountant Certificate: The appellant provided a detailed worksheet certified by a Chartered Accountant regarding the availment of credit, which the Adjudicating Authority did not accept. The Tribunal noted that the CA certificate should not be disregarded without valid reasons, as its acceptance has been upheld in previous decisions by higher courts. The Adjudicating Authority's failure to consider the CA certificate was seen as a departure from established legal principles. In conclusion, the Tribunal found that the impugned order was not sustainable and set it aside, allowing the appeal with any consequential benefits. The decision highlighted the importance of following the procedures laid down in CBEC Circulars and giving due consideration to Chartered Accountant certificates in such matters.
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