2009 (7) TMI 1002 - AT - Central Excise

Summary

Issues involved:
The dispute in the present appeal relates to whether the appellants, engaged in the manufacture of plastic bags, are entitled to the credit of education cess paid on the inputs while receiving the same from a 100% E.O.U. The Revenue contends that as per Rule 3(7)(a), they are entitled to credit of duty paid on the inputs excluding education cess, leading to demands being confirmed against them.

Details of the Judgment:

Issue 1 - Applicability of Education Cess Credit:
The appellant argues that the formula for availing credit is only for basic custom duty and counter vailing duty, not including education cess. They assert that since education cess was introduced after the rules were in place, the formula does not consider it. Citing a Tribunal decision in a similar case, the appellant claims entitlement to credit on education cess for supplies made by 100% EOU.

Issue 2 - Judicial Hierarchy and Prima Facie Case:
The Assistant Commissioner and Commissioner (Appeals) have differing views on the applicability of a Tribunal judgment allowing credit on education cess. The Assistant Commissioner's stance is criticized for not following the principle of judicial hierarchy, as higher appellate forum decisions should be adhered to. The Tribunal finds that the appellants have established a good prima facie case, leading to the unconditional allowance of stay petitions and fixing the appeals for final disposal.

In conclusion, the Tribunal acknowledges the appellant's argument regarding the non-inclusion of education cess in the credit formula and the importance of upholding judicial hierarchy in decision-making. The stay petitions are granted, and the appeals are scheduled for final disposal on a specified date.