2019 (6) TMI 896 - AT - Central Excise

Reversal of CENVAT Credit - condition B of sub rule 3 of Rule 6 of Cenvat Credit Rules, 2004 - credit attributed to the exempted goods - HELD THAT - The issue has been settled in appellant s own case in MAIZE PRODUCTS VERSUS CCE 2007 (1) TMI 583 - CESTAT AHMEDABAD where it was held that We are convinced that the demand is highly disproportionate to the credit availed on the common inputs which could be attributed to goods which have been cleared without payment of duty. Appeal dismissed - decided against Revenue.

Summary

Issues:
- Appeal against dropping of Show Cause Notice by Commissioner regarding CENVAT credit reversal and penalty imposition.
- Applicability of Tribunal and High Court decisions in similar cases.
- Effect of retrospective amendment in Cenvat Credit Rules.

Analysis:
1. The appeal was filed by Revenue against the dropping of Show Cause Notice issued to M/s Maize Products by the Commissioner. The appellant was engaged in manufacturing exempted or nil rate excisable goods and availing CENVAT credit. The Commissioner relied on the Tribunal's decision in the appellant's own case and observed that the appellant had reversed the credit at a certain rate on the quantity attributed to exempted goods. The Revenue challenged this decision based on a High Court decision in another case.

2. The Counsel for the respondent pointed out that in their own case, the Tribunal had granted them relief in similar circumstances based on the decision of the High Court of Allahabad and Gujarat. Furthermore, the Supreme Court had dismissed the Special Leave Petition filed by Revenue against the High Court's decision. This highlighted the consistency in decisions favoring the respondent's position.

3. The Tribunal reviewed the rival submissions and noted that the issue had been settled in the appellant's own case by the Tribunal's decision upheld by the High Court of Gujarat. Additionally, a retrospective amendment in 2010 to Rule 6 of the Cenvat Credit Rules provided relief in similar circumstances. The Tribunal referred to a case where the High Court of Madras granted relief based on the retrospective amendment, emphasizing the legislative intent behind the amendment.

4. Considering that the appellant had already reversed the credit even before the retrospective amendment and that the Tribunal's decision aligned with the provisions of the Finance Act, 2010, the Tribunal found no merit in the Revenue's appeal. Consequently, the appeal filed by the Revenue was dismissed, affirming the decisions based on previous rulings and legislative amendments.

This detailed analysis of the judgment highlights the key issues addressed by the Tribunal, the significance of previous decisions, and the impact of legislative amendments on the case at hand.