2012 (9) TMI 208 - AT - Central Excise

Demand for duty - entitlement of the appellant to avail Cenvat credit - assessee is 100% E.O.U. - cleared the goods in those circumstances at the same time had sought to avail exemption under Notification No. 30/2004-C.E. dated 9-7-2004 allegedly by mistake Held that - Once it is not in dispute that the appellants were 100% E.O.U. and all the goods manufactured by them were cleared for export and were actually exported under B-17 Bond executed by the appellants on 27-1-04 and there is a clear statement on the part of the appellants that reference to the Notification No. 30/04-C.E. dated 9-7-04 was by mistake on their part considering the provisions of law comprised under Rule 6(6) of the Cenvat Credit Rules - demand confirmed against them while denying the credit is not justified.

Summary

Issues:
Entitlement of Cenvat credit for 100% E.O.U. availing exemption under Notification No. 30/2004-C.E.

Analysis:
The judgment pertains to the controversy surrounding the entitlement of Cenvat credit for a 100% Export Oriented Unit (E.O.U.) that availed exemption under Notification No. 30/2004-C.E. The Commissioner of Central Excise, Thane, confirmed a demand for duty, interest, and penalty against the appellant. The appellant had cleared goods for export without payment of duty but mistakenly sought exemption under the said notification. The key issue was whether the appellant could avail Cenvat credit under Rule 6(6) of the Cenvat Credit Rules despite availing the exemption. The advocate for the appellant argued that since all goods were cleared for export as a 100% E.O.U., the credit should not be denied. Reference was made to legal precedents such as Repro India Ltd. v. Union of India, Hero Cycles Ltd. v. Union of India, and East India Commercial Co. Ltd., Calcutta, to support the appellant's contention.

The Tribunal noted that the appellant was indeed a 100% E.O.U. and had cleared all goods for export under a bond. The appellant claimed that the reference to the exemption notification was a mistake. Citing Rule 6(6) of the Cenvat Credit Rules and the decision in Repro India Ltd. case, the Tribunal found merit in the appellant's argument. The Bombay High Court's decision in Hero Cycles Ltd. case was referenced, emphasizing that the authority must assess duty according to law, and a mistake or oversight by the taxpayer should not result in unjust assessment. The Tribunal acknowledged the binding nature of legal precedents and granted a stay on the impugned order, waiving the amount demanded pending appeal, including duty, interest, and penalty.

In conclusion, the Tribunal upheld the appellant's right to avail Cenvat credit as a 100% E.O.U. despite mistakenly seeking exemption under Notification No. 30/2004-C.E. The judgment highlighted the importance of following legal precedents, assessing duty in accordance with the law, and preventing manifest injustice in tax assessments.