2013 (3) TMI 292 - AT - Central Excise

Notification NO. 10/2002-CE - benefit denied as IC engines which were captively consumed in the manufacture of PD pump sets cleared by availing the benefit of Notification No. 6/2002 - appellants contented that the appellants are reversing the credit of 8% of the price of the IC engines captively consumed in the manufacture of PD pumps which were cleared by availing the benefit of the Notification - Held that - Tribunal in the case of Life Long Appliances Ltd. vs. CCE Delhi- III (2000 (4) TMI 90 - CEGAT COURT NO. II NEW DELHI) in the similar situation held that the payment of an amount equivalent to 8% of the price of intermediate product which has gone into manufacture of exempted products is sufficient compliance to the provisions of Cenvat Credit Rules also confirmed by the Hon ble Supreme Court 2006 (3) TMI 687 - SUPREME COURT The Revenue is not disputing the fact that the appellants were reversing 8% of the price of intermediate product which had gone into the manufacture of exempted goods. Therefore impugned order is set aside and the appeals are allowed.

Summary

Issues: Appeal for adjournment request, denial of benefit of Exemption Notification, reversal of credit for intermediate product, applicability of Tribunal decision and Supreme Court ruling.

Adjournment Request:
The appellant made a request for adjournment, which was declined as the appeal had already been adjourned twice at the appellant's request. The learned Additional Commissioner was heard in response to the appellant's request.

Denial of Benefit of Exemption Notification:
The appellants were engaged in manufacturing excisable goods and had availed the benefit of Exemption Notification No.10/2002-CE for PD pump sets. The Revenue denied this benefit, claiming that the appellants availed credit for common inputs used in the manufacture of IC engines, which were cleared on payment of excise duty. The Revenue contended that the IC engines, captively consumed in the manufacture of PD pump sets, did not qualify for the exemption.

Reversal of Credit for Intermediate Product:
The appellants argued that they were reversing the credit of 8% of the price of IC engines captively consumed in the manufacture of PD pumps cleared under the Notification. The Tribunal's decision in Life Long Appliances Ltd. vs. CCE, Delhi-III was cited, where it was held that such payment was sufficient compliance with the Cenvat Credit Rules. The Supreme Court also upheld this decision in CCE vs. Life Long Appliances Ltd. The Revenue did not dispute that the appellants were reversing 8% of the price of the intermediate product, leading to the applicability of the Tribunal's decision in the present case.

Applicability of Tribunal Decision and Supreme Court Ruling:
Given the settled issue based on the Tribunal's decision and the Supreme Court's ruling, where the payment of 8% of the price of the intermediate product sufficed for compliance, the impugned order was set aside, and the appeals were allowed. The Revenue's acknowledgment of the appellants' compliance with the reversal of credit further supported the decision in favor of the appellants.

This comprehensive analysis of the judgment highlights the issues raised, the arguments presented, and the legal precedents that influenced the final decision in favor of the appellants.