2022 (12) TMI 4 - AT - Central Excise

Reversal of proportionate credit attributed to exempted goods - whether the assessee is required to pay 10% in terms of Rule 6(3)(a) of Cenvat Credit Rules, 2004, prevailing at the relevant period January 2006 to March 2006? - HELD THAT - It is observed that the Adjudicating Authority has taken congnizance of the Tribunal s remand order which recorded that the issue stand decided by the Larger Bench of the Tribunal in the case of NICHOLAS PIRAMEL (I) LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, THANE-I 2008 (8) TMI 97 - CESTAT MUMBAI . However, the learned Commissioner also observed that controversy involved was the similar to the controversy in the case of COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD-II VERSUS MAIZE PRODUCTS 2008 (8) TMI 365 - HIGH COURT OF GUJARAT AT AHMEDABAD wherein the Hon ble High Court of Gujarat has dismissed the department s appeal. Subsequently, the High Court order COMMISSIONER OF C. EX., AHMEDABAD-II VERSUS ANIL PRODUCTS LTD. 2010 (7) TMI 444 - GUJARAT HIGH COURT in the case of Maize Products was challenged before the Hon ble Supreme Court and the Hon ble Supreme Court in COMMR. OF CEN. EXC. -II, AHMEDABAD VERSUS M/S. MAIZE PRODUCTS 2009 (11) TMI 1024 - SC ORDER dismissed the Revenue s appeal. The ruling laid-down in the case of M.s, Maize Products will be prevalent over the judgment of M/s Nicholas Piramal (I) Limited passed by Hon ble Bombay High Court. Moreover, this Tribunal being under the jurisdiction of Hon ble Gujarat High Court, judgment of M/s. Maize Products is more relevant and binding than any other judgment - there are no infirmity in the order of learned Commissioner - appeal of Revenue dismissed.

Summary

Issues involved:
Interpretation of Rule 6(3)(a) of Cenvat Credit Rules, 2004 regarding payment of 10% in case of reversed credit for exempted goods.

Analysis:

1. Issue of Reversed Credit for Exempted Goods:
The central issue in this case revolves around the requirement for an assessee to pay 10% in accordance with Rule 6(3)(a) of the Cenvat Credit Rules, 2004, for reversed credit attributed to exempted goods. The Revenue contended that the demand of 10% of the dutiable price value of Maize starch, exempted from duty payment, should be upheld based on a decision by the Hon'ble Bombay High Court in a previous case. The learned Commissioner initially dropped the demand, citing a Tribunal order for verification of the claim regarding credit availed and reversed proportionately.

2. Tribunal's Consideration and Remand Order:
The Tribunal carefully considered the submissions and the remand order, which highlighted the need to verify the correctness of the reversal of credit claimed by the appellant. The Tribunal observed that the issue had been decided by a Larger Bench decision in a case involving M/s Nicholas Piramal (I) Limited. However, the Commissioner noted that a similar controversy in the case of M/s. Maize Products had been dismissed by the Hon'ble High Court of Gujarat and subsequently by the Supreme Court. This led the Tribunal to prioritize the judgment of M/s. Maize Products over the decision of M/s Nicholas Piramal (I) Limited, given the relevance and binding nature of the former judgment.

3. Prevalence of Maize Products Judgment:
Considering the jurisdiction of the Tribunal under the Hon'ble Gujarat High Court, the ruling in the case of M/s. Maize Products was deemed more significant and binding than other judgments. Therefore, the Tribunal upheld the order of the learned Commissioner, ultimately dismissing the Revenue's appeal based on the precedence and relevance of the Maize Products judgment over the Nicholas Piramal (I) Limited decision.

In conclusion, the Tribunal's detailed analysis and consideration of relevant precedents led to the dismissal of the Revenue's appeal, emphasizing the significance of the Maize Products judgment in determining the applicability of Rule 6(3)(a) of the Cenvat Credit Rules, 2004 in cases of reversed credit for exempted goods.