2024 (8) TMI 1207 - AT - Central Excise

Valuation - inclusion of value of clearance of exports made by the appellant for which duty was not paid by availing exemption under N/N. 30/2004-CE dated 09.07.2004, while reversing the credit of inputs taken, as per Rule 6 of CCR 2004 - HELD THAT - The issue stands covered by the decision in the case of COMMISSIONER OF CENTRAL EXCISE VERSUS DRISH SHOES LTD. 2010 (5) TMI 334 - HIMACHAL PRADESH HIGH COURT , wherein the Hon ble High Court has analyzed the issue as to whether credit is eligible on the duty paid on inputs and input services used in the manufacture of exempted goods which are exported - it was held that even if the exempted goods are exported, credit is eligible. Once the issue does not sustain on merits the question of examining the dispute relating to interest and penalty does not arise. The demands cannot be sustained. The impugned orders are set aside - Appeal allowed.

Summary

Issues:
Appeal against Order in Appeal No. 146 & 148/2014 dated 23.12.2014 passed by the Commissioner of Central Excise (Appeals), Coimbatore @ Madurai.

Detailed Analysis:

Issue 1:
The dispute revolves around whether the value of clearance of exports made by the appellant, for which duty was not paid by availing exemption under Notification No. 30/2004-CE dated 09.07.2004, should be included while reversing the credit of inputs taken, as per Rule 6 of CCR 2004.

Analysis:
The Hon'ble High Court's decision in the case of M/s. Drish Shoes Ltd. and subsequent Tribunal decisions in similar matters have established that even if exempted goods are exported, credit is eligible on duty paid on inputs and input services used in their manufacture. The Tribunal held that the demand for the appellant to pay/reverse duty amount, including the value of export clearances, was not proper. Judicial discipline requires following established judgments, and in this case, the demands were deemed unsustainable, leading to the setting aside of the impugned orders and allowing the appeals.

Conclusion:
The demands made by the department were found to be unsustainable based on established legal principles and precedents. The impugned orders were set aside, and the appeals were allowed with consequential reliefs, as per the law.