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2017 (6) TMI 311 - AT - Central ExciseReversal of CENVAT credit - electricity sold outside - Rule 6 of the CCR 2004 - demand on the ground that the appellants have not produced the details in respect of the proportionate credit on inputs used in or in relation to the manufacture of the said quantity of electricity - Held that - the issue is no more res integra and has been settled in favour of the appellant in the case of Venkateshwara Power Project Ltd Versus Commissioner of Central Excise, Customs and Service Tax 2016 (10) TMI 32 - CESTAT BANGALORE , where it was held that the issue involved is no more res integra in terms of the decision of Hon ble Allahabad High Court in the case of Balrampur Chini Mills Ltd Vs UOI 2013 (1) TMI 525 - ALLAHABAD HIGH COURT wherein the Board Circular No. 904/24/2009-CX dated 28/10/2009 requiring reversal of credit or payment of amount in terms of Rule 6 stands quashed. Demand set aside - appeal allowed - decided in favor of assessee.
Issues:
- Dispute over demand for payment of electricity sold to M/s. KPTCL during a specific period under Cenvat Credit Rules. - Legality of the Order-in-Original confirmed by the Additional Commissioner and subsequent appeals. - Compliance with directions of the Commissioner (Appeals) and justification for confirming the demand. - Appellant's argument against the de novo order and extended period of limitation. - Applicability of settled legal precedents in favor of the appellant. Analysis: 1. Dispute over Demand for Payment: The appellants, engaged in sugar and molasses manufacturing, sold electricity to M/s. KPTCL during a specific period. The audit party directed them to pay 10% of the selling price as per the Audit Report. A show-cause notice was issued demanding payment under Cenvat Credit Rules. The Additional Commissioner confirmed the demand, leading to appeals and subsequent legal proceedings. 2. Legality of Order-in-Original: The Commissioner (Appeals) set aside the Order-in-Original, directing the Additional Commissioner to calculate the cenvat credit and recover it from the appellant. However, the Additional Commissioner confirmed the demand in a de novo order despite the pending appeal before the Tribunal. The appellant argued that the Additional Commissioner's order was void ab-initio and failed to comply with the directions of the Commissioner (Appeals). 3. Compliance with Directions and Justification: The appellant contended that the Additional Commissioner ignored the directions given in the Order-in-Appeal and passed the Order-in-Original on different grounds, which were nullified. The appellant's failure to attend hearings and provide details for calculating the proportionate credit on inputs was cited as a reason for confirming the demand, despite the Commissioner's acknowledgment that the appellants were not liable to pay the amount under Rule 6 of the Cenvat Credit Rules. 4. Appellant's Arguments and Legal Precedents: The appellant argued against the de novo order, extended limitation period, and the demand for payment. They cited legal precedents where similar issues were settled in favor of the appellant, emphasizing that the issue was debatable and the demand was unjustified. The appellant highlighted that the subsequent period's proceedings against them were dropped based on legal decisions favoring the appellant. 5. Final Judgment: After considering submissions and legal precedents, the Tribunal found in favor of the appellant, setting aside the impugned orders and allowing all three appeals with consequential relief. The Tribunal concluded that the issue was settled in favor of the appellant by legal precedents and that the impugned orders were not sustainable in law, leading to the decision to overturn them.
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