2015 (1) TMI 528 - AT - Central Excise

CENVAT Credit - Whether the assessee can avail Cenvat Credit on the inputs, capital goods and input services used in the manufacture of finished goods and make payment of Central Excise Duty @ 4% advelorum as provided under Notification No. 59/2008/CE dtd 7.12.2008 when another Notification No. 29/2004 CE dtd 9.7.2004 as amended specified Nil rate of duty on the said finished goods and was operative at the material period - Held that - Following decision of Arvind Mills Ltd 2014 (6) TMI 271 - CESTAT AHMEDABAD - impugned order is liable to be set aside - Decided in favour of assessee.

Summary

Issues:
Whether the appellant can avail Cenvat Credit on inputs, capital goods, and input services used in the manufacture of finished goods and pay Central Excise Duty at 4% ad valorem under Notification No. 59/2008-CE when another Notification No. 29/2004-CE specified a 'Nil' rate of duty on the finished goods during the relevant period.

Analysis:
The appeals were directed against OIO No.02-903/Commr/2011, pertaining to the clearance of Cotton Fabrics in the domestic market and for export under a rebate claim on Central Excise duty. The appellant availed Cenvat Credit on inputs, capital goods, and input services during a specific period. However, Notification Nos. 58/08-CE and 59/08-CE dated 07.12.2008, issued under Section 5A(1) of the Central Excise Act, were relevant. The former amended the rate of duty to Nil on finished products, affecting the eligibility for Cenvat Credit. The appellant was required to reverse the Cenvat Credit on inputs used in manufacturing exempted goods and failed to do so, leading to the show cause notice and confirmation by the Adjudicating Authority after a personal hearing.

The primary issue revolved around whether the appellant could avail Cenvat Credit under Notification No. 59/2008-CE while another notification specified a Nil rate of duty on finished goods during the same period. Both parties acknowledged a previous decision by the Bench in the case of Arvind Mills Ltd, which was produced for reference. The Bench reviewed the final order from the Arvind Mills Ltd case and the current records. It was concluded that the issue in question had already been addressed and decided by the Bench in the earlier case.

Consequently, based on the precedent set in the case of Arvind Mills Ltd, the Bench held that the impugned order was to be set aside, leading to the allowance of the appeals. The impugned order was officially set aside, and the appeals were allowed as a result of the established legal precedent.