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2024 (10) TMI 897 - AT - Central ExciseCENVAT Credit in respect of input and/ or input service used in the manufacture of goods cleared at 2% duty under Notification No.01/2011-CE - HELD THAT - In the present case, it is not the case of the department that the appellant have taken Cenvat Credit in respect of any input or input service which were used in the manufacture of excisable goods which are cleared by availing the Notification No.01/2011-CE dated 01.03.2011. As per facts the only charge of the department is that the appellant have utilized the Cenvat Credit for payment of 2% duty on the excisable goods cleared under Notification No.01/2011-CE. - there are no restriction for the assessee to utilize the Cenvat Credit which was correctly and legally availed on the input and input service which were used in the manufacture of goods cleared at the rate of 6%. Therefore, only restriction is the assessee is barred to take the Cenvat Credit on input and/or input service used in the manufacture of excisable goods cleared under Notification No.01/2011-CE which is not the case here. Therefore, the appellant have not contravened the condition of Notification No.01/2011-CE. The appellant have reversed the amount of Cenvat Credit utilized for payment of 2% excise duty along with the payment of interest. After payment of Cenvat credit which was utilized along with the payment of interest, the situation becomes as if no Cenvat Credit has been availed. The impugned order is not sustainable, hence, the same is set aside - Appeal allowed.
Issues:
1. Availment of Cenvat credit on goods cleared under different duty rates. 2. Compliance with Notification No.01/2011-CE regarding Cenvat credit utilization. 3. Adjudication of demand for excise duty, interest, and penalty. 4. Appeal against Order-In-Original and Order-In-Appeal. Detailed Analysis: 1. The case involved the appellant engaged in manufacturing excisable goods under Chapter 19 & 20, availing Cenvat credit on inputs. The issue arose when the department observed discrepancies in the clearance of finished goods at different duty rates, leading to the demand for excise duty payment and penalties. The appellant admitted the error, reversed the credit, paid the due amount, and interest. The show cause notice was issued, and subsequent adjudication confirmed the demand, interest, and penalties. 2. The appellant contended that they did not avail credit for goods cleared under Notification No.01/2011-CE, only utilizing Cenvat credit for goods cleared at the 2% duty rate. They argued that by reversing the credit and paying the due amount, they complied with the notification's conditions. The tribunal analyzed the notification's requirement, emphasizing that the appellant did not avail credit for inputs used in goods cleared under the said notification. The tribunal referenced legal precedents to support the appellant's compliance with the notification's conditions. 3. The Revenue reiterated the findings of the impugned order, supporting the demand for excise duty, interest, and penalties. However, the tribunal found that the appellant had not contravened the conditions of Notification No.01/2011-CE as they did not avail credit for inputs used in goods cleared under the notification. The tribunal also noted that the appellant had reversed the Cenvat credit utilized for the 2% duty payment and paid interest, aligning with legal precedents that established compliance in such scenarios. The tribunal distinguished the Revenue's reliance on a specific judgment, emphasizing the consistent application of precedents favoring the appellant's position. 4. After considering the submissions and records, the tribunal concluded that the impugned order was not sustainable. As a result, the tribunal set aside the order, allowing the appeal with consequential relief. The judgment was pronounced in open court on a specified date. This detailed analysis outlines the issues, arguments presented by both parties, the tribunal's evaluation of compliance with the notification's conditions, and the final decision to set aside the impugned order in favor of the appellant.
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