2020 (1) TMI 269 - HC - Central Excise

Maintainability of appeal - pre-admission stage - Section 35G of the Central Excise Act, 1944 - Taxability - classification as agricultural machinery - HELD THAT - While according to the assessee, being a manufacturer of small agricultural implements for classification as agricultural machinery, they were exigible to Nil rate of duty, the department had other views and it is this dispute which led to the proceeding which ultimately culminated in the order of the Tribunal who have decided in favour of the assessee. There are no reasons to interfere with the opinion of the Tribunal - no substantial question arises in the present appeal for inviting admission - appeal dismissed.

Summary

Issues:
1. Appeal against the order of the Customs, Excise and Service Tax Appellate Tribunal.
2. Classification of small agricultural implements as agricultural machinery for duty rate.
3. Accruing benefit of input tax credit under Modvat Credit Procedure.
4. Reliance on Supreme Court judgment for input tax credit benefit.
5. Dispute resolution and legal position on the matter.

The judgment pertains to an appeal against the order of the Customs, Excise and Service Tax Appellate Tribunal, Kolkata, specifically Excise Appeal No. 624 of 2008, where the order passed by the Commissioner of Central Excise, Patna, was set aside to allow the appeal. The appeal was preferred under Section 35G of the Central Excise Act, 1944, allowing appeals to the High Court on substantial questions of law. The dispute arose from the classification of small agricultural implements as agricultural machinery for duty rate purposes. The assessee contended that they were eligible for a Nil rate of duty, while the department held a different view, leading to the Tribunal's decision in favor of the assessee.

The assessee, in challenging the assessment order, also raised the issue of accruing the benefit of input tax credit under the Modvat Credit Procedure. The assessee argued that even if the goods were subject to tax, the input tax credit already suffered by the goods should exempt them from Excise Duty, resulting in a credit in favor of the assessee. Citing a Supreme Court judgment (Formica India Division v. Collector of Central Excise), the assessee claimed entitlement to the input tax credit benefit, which the Tribunal acknowledged. The Tribunal's decision was influenced by the substantial credit available to the assessee, exceeding the duty in demand.

Upon considering the submissions, the High Court found no grounds to interfere with the Tribunal's decision, aligning with the legal precedent set by the Supreme Court on similar matters. The High Court concluded that the issue was settled, and no substantial question arose for admission. Consequently, the appeal was disposed of accordingly, affirming the Tribunal's decision in favor of the assessee.