Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2023 (7) TMI AT This

  • Login
  • Cases Cited
  • Summary

Forgot password       New User/ Regiser

⇒ Register to get Live Demo



 

2023 (7) TMI 1236 - AT - Central Excise


Issues Involved:
1. Disallowance and recovery of CENVAT credit.
2. Recovery of interest and penalty.
3. Utilization of unutilized CENVAT credit after availing exemption.

Summary:

Disallowance and Recovery of CENVAT Credit:
The appellant was issued a show cause notice on 15.12.2011 proposing to disallow and recover CENVAT credit of Rs. 4,42,539 under Rule 14 of the CENVAT Credit Rules, 2004 read with Section 11A(1) of the Central Excise Act, 1944. The department contended that the appellant, while availing Notification No. 30/2004-CE, was not entitled to utilize the unutilized CENVAT credit after reversal. The Adjudicating Authority confirmed the demand, which was upheld by the Commissioner (Appeals). The appellant argued that the issue was settled in various judgments, asserting that the unutilized CENVAT credit could be utilized as the exemption was conditional.

Recovery of Interest and Penalty:
The show cause notice also proposed to recover interest under Rule 14 of CENVAT Credit Rules, 2002 read with erstwhile Section 11AB of the Central Excise Act, 1944, and an equal penalty amounting to Rs. 4,42,539 under Rule 15(2) of CENVAT Credit Rules, 2004 read with Rule 25 of Central Excise Rules, 2002. The Adjudicating Authority and Commissioner (Appeals) upheld the interest and penalty.

Utilization of Unutilized CENVAT Credit:
The Tribunal found that Notification No. 30/2004-CE is conditional and not absolute, as per Rule 11(3) of CENVAT Credit Rules. Clause (ii) of Rule 11(3) applies only when the exemption is absolute, leading to the lapse of remaining unutilized CENVAT credit. Since the exemption in question was conditional, the remaining unutilized CENVAT credit did not lapse. The Tribunal cited various judgments, including Synfab Sales & Industries Ltd, Orient Syntex, Patodia Filaments Pvt. Ltd., and others, supporting the appellant's position that the balance credit shall not lapse under a conditional exemption.

Conclusion:
The Tribunal set aside the impugned order and allowed the appeal, affirming that the issue is no longer res-integra and the remaining unutilized CENVAT credit under a conditional exemption notification does not lapse. The appeal was allowed with consequential reliefs.

 

 

 

 

Quick Updates:Latest Updates