2024 (1) TMI 445 - AT - Central Excise

CENVAT credit - clearance of exempted goods without following the procedures laid down under Rule 6 of CENVAT Credit Rules, 2004 - duty paid by the appellant by debiting SFIS (Served from India Scheme) scrips for clearance of tipper trucks during the relevant period - recovery of 6% of the value of the exempted goods with interest and penalty - HELD THAT - The Appellate Tribunal in its impugned order had held that appellant had cleared the dutiable finished goods by debiting the same under SFIS (Served from India Scheme). There is no dispute as regards the correctness of said certificates and debits made therein. Such clearances made by appellants under Notification No. 34/2006-C.E. would not be considered as exempted clearances and the appellant is not required to pay amount equal to 10% of the value of goods cleared by availing benefit of said notification. In the clearance of 131 Nos. of tipper trucks, the scrips utilised for debiting the duty in availing exemption Notification No.34/2006-CE dated 14.06.2006 as amended vide Notification No.15/2013-CE dated 18.04.2013, would not be considered as exempted goods; hence, Rule 6 of CENVAT Credit Rules, 2004 cannot be attracted. The impugned order is set aside - Appeal allowed.

Summary

Issues involved:
The appeal against Order-in-Original passed by the Commissioner of Central Excise, Bangalore regarding clearance of goods without following procedures under Rule 6 of CENVAT Credit Rules, 2004.

Facts of the case:
The appellant manufactured and cleared tipper trucks to a company holding SFIS certificate without payment of duty, leading to a demand for recovery. The appellant contended that duty paid using SFIS scrips should not be considered exempted goods under Rule 6.

Appellant's arguments:
The appellant argued that duty paid through SFIS scrips should not be treated as exempted goods, citing the judgment of the Hon'ble Gujarat High Court and subsequent cases supporting their position. They also referred to Circulars clarifying the treatment of duty paid through scrips.

Revenue's stance:
The Authorised Representative for the Revenue supported the findings of the Commissioner regarding the demand for recovery.

Tribunal's decision:
The Tribunal analyzed the issue of whether duty paid through SFIS scrips should be considered exempted goods under Rule 6. Citing the judgment of the Hon'ble Gujarat High Court, the Tribunal held that such clearances do not amount to exempted goods. The Board's Circular further supported this position, clarifying that debiting duty in scrips should be treated as payment of duty.

Conclusion:
The Tribunal set aside the demand for recovery, ruling that the appellant's clearance of goods using SFIS scrips did not fall under exempted goods, thereby exempting them from Rule 6 of CENVAT Credit Rules, 2004. The appeal was allowed with consequential relief as per law.