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2017 (5) TMI 327 - AT - Central ExciseMODVAT Credit - inputs used in the manufacture of exempted goods - N/N. 15/1994-CE - the Appellant had reversed the proportionate CENVAT Credit on the inputs attributable to the products cleared from the factory, claiming benefit of exemption N/N. 15/1994-CE, dt.1.3.94 - Held that - The very same issue has been considered by Hon ble Allahabad High Court in Hello Mineral Water (P) Ltd 2004 (7) TMI 98 - ALLAHABAD HIGH COURT , where it was held that petitioner is thus entitled to the benefit of the said Notification No.15/1994-CE, dated 1-3-2004 and reversal of Modvat credit on the inputs namely PVC granules used in the manufacture of PVC/PP bottles, which have been admittedly reversed by the petitioner, even though after clearance of the final product - appeal dismissed - decided against Revenue.
Issues:
Revenue's appeal against OIO No.09/COMMR/2005 for non-compliance with Rule 6A of CESTAT (Procedure) Rules, 1982. Allegation of wrongful availing of exemption under Notification No.15/1994-CE. Dispute over MODVAT Credit availed on inputs used in manufacturing exempted goods. Contention regarding imposition of personal penalty on respondents. Analysis: The appeals were filed by the Revenue against OIO No.09/COMMR/2005 for non-compliance with Rule 6A of CESTAT (Procedure) Rules, 1982, as a consolidated appeal was filed instead of three separate appeals. Condonation applications were filed for the delay, which was allowed. The appeals were taken up for disposal with the consent of both sides. The case involved the Respondents engaged in manufacturing various products falling under different chapters of the Central Excise Tariff Act, 1985. The Revenue alleged that the Respondents wrongly availed the benefit of exemption under Notification No.15/1994-CE by not fulfilling the conditions of non-availment of MODVAT Credit on inputs used in the manufacture of exempted goods. The demand notice was issued for duty recovery, interest, and penalty, which was dropped by the learned Commissioner, leading to the Revenue's appeal. The Revenue contended that the Respondent-Assessee availed MODVAT Credit on inputs used in manufacturing certain products, not fulfilling the conditions of the exemption notification, even though the proportionate credit was later reverted. The Revenue argued for the imposition of personal penalty on other respondents, which was not done by the Commissioner. On the other hand, the Respondents' Advocate argued that although CENVAT Credit was initially availed, it was later reversed on inputs used in manufacturing finished goods claimed under the exemption Notification. The issue was argued to be settled law based on previous court judgments, including those of the Allahabad High Court and the jurisdictional High Court. The Tribunal found that the Respondent had indeed reversed the proportionate CENVAT Credit on inputs used in cleared products claiming the exemption under Notification No.15/1994-CE. Citing the judgment of the Allahabad High Court, the Tribunal dismissed the Revenue's appeal, finding no merit in it. In conclusion, the Tribunal dismissed the Revenue's appeal, stating that the Respondents were entitled to the benefit of the exemption notification based on the reversal of MODVAT credit on inputs used in manufacturing the exempted goods, following established legal precedents.
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