2018 (5) TMI 911 - AT - Central Excise

CENVAT credit - common inputs - fuel input was used commonly for production of exempted goods and dutiable goods - Rule 6(1) of CCR 2002 - Held that - reliance placed in the case of COMMISSIONER OF CENTRAL EXCISE Versus DALMIA MAGNESITE CORPORATION 2010 (7) TMI 144 - DELHI HIGH COURT , where it was held that Sub-rule (1) shall apply in respect of goods used as fuel and on such application, the credit will not be permissible on such quantity of fuel which is used in the manufacture of exempted goods - appeal dismissed - decided against appellant.

Summary

Issues:
1. Whether the appellants are liable to reverse the proportionate CENVAT credit attributable to exempted goods under Rule 6(1) of CENVAT Credit Rules, 2002 when fuel input is used for both exempted and dutiable goods.

Analysis:
1. The appeal challenged the Commissioner's order confirming a demand but setting aside the penalty related to availing CENVAT credit on fuel used for manufacturing both dutiable and exempted ayurvedic medicines. The dispute centered on the appellant's eligibility to avail CENVAT credit under Rule 6(1) of the CENVAT Credit Rules, 2002 for fuel used in generating steam for non-dutiable products.

2. The Revenue argued that the issue was settled by previous court decisions, including the Supreme Court's rulings in various cases. The appellant's counsel conceded that the Supreme Court had decided in favor of the Revenue on this matter.

3. The Tribunal noted that the issue had been conclusively settled in favor of the Revenue by the Supreme Court's judgments. Referring to the Supreme Court's judgment in a specific case, the Tribunal highlighted the principle that CENVAT credit for duty paid on inputs used in manufacturing exempted final products is not allowable. The Tribunal concluded that the appellant was not entitled to the benefit under Rule 6(1) of the CENVAT Credit Rules, 2002.

4. Based on the apex court's decision and the settled legal position, the Tribunal dismissed the appellant's appeal, finding no merit in their case. The Tribunal upheld the demand and set aside the penalty, aligning with the Supreme Court's interpretation of Rule 6(1) of the CENVAT Credit Rules, 2002.

This detailed analysis of the judgment covers the issues involved, the arguments presented by both parties, and the Tribunal's decision based on the settled legal position established by the Supreme Court's rulings.