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2016 (10) TMI 338 - AT - Central ExciseCENVAT credit - inputs received from 100% EOU - Special Additional Duty - Notification No.23/2003-CE dt. 31/03/2003 states that a formula was fixed for taking the CENVAT credit on the goods received from the 100% EOU and it is restricted to 50% of the actual amount of duty paid on the inputs - for Special Additional Duty of Customs, the CENVAT credit on the goods cannot be allowed - whether the demand raised on the appellant for availing excess 50% of CENVAT credit on inputs received from 100% EOU and for availing credit on special additional duty justified? - Held that - the appellants had not availed the benefit of Notification No.23/2003-CE dated 31.03.2003 and that therefore the demand is not sustainable. The issue involved is covered by the the case of CCE, Chennai vs Jumbo Bags Ltd. 2011 (11) TMI 565 - CESTAT CHENNAI where it was held that in respect of supplies for which no exemption has been availed, the appellants are correct in taking credit of the entire amount of duty equivalent to the excise duty and cess. Demand unsustainable - appeal allowed - decided in favor of appellant.
Issues:
1. Incorrect availing of CENVAT credit by the appellants. 2. Interpretation of Notification No.23/2003-CE dated 31.03.2003. 3. Sustainability of the demand raised by the Department. Analysis: Issue 1: Incorrect availing of CENVAT credit The appellants, who are manufacturers of Aluminium Ingots and Hollow Profiles, were found to have utilized CENVAT credit on 100% instead of the permissible 50% on inputs received from a 100% Export Oriented Unit (EOU). The Department contended that the excess credit taken amounted to irregular utilization. A show-cause notice was issued, proposing recovery of the irregularly availed credit. The proposals were confirmed at both the original and appellate levels, leading to the current appeal. Issue 2: Interpretation of Notification No.23/2003-CE The appellant's counsel argued that the demand was not sustainable as the appellants had not availed the benefit of Notification No.23/2003-CE dated 31.03.2003. The counsel relied on judgments in G.R. Poly films Pvt Ltd Vs. CCE, Kolkatta and CCE, Chennai vs Jumbo Bags Ltd. to support their case. These judgments were cited to demonstrate that the issue at hand had been previously addressed and decided in favor of the appellants. Issue 3: Sustainability of the demand In line with the judgments referenced by the appellant's counsel, the Tribunal held that the demand raised by the Department was unsustainable. Citing the precedents, the Tribunal set aside the impugned order and allowed the appeal with consequential reliefs, if any. The decision was pronounced in court at the conclusion of the hearing, providing a favorable outcome for the appellants based on the interpretation of relevant legal provisions and past judicial decisions.
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