2019 (3) TMI 1043 - AT - Central Excise

SSI exemption - use of brand name - use of brand name Shukla in respect of medication equipment exported - N/N. 08/2003 - CENVAT Credit - Held that - The appellant have denied that they have used brand name Shukla and there is no evidence to support the Revenue s claim that the appellants are using the brand name Shukla . It is seen the appellants are clearing waste and scrap in the domestic market and the value of waste and scrap cleared by them in the domestic area was within the limit prescribed under notification 08/2003-CE. Consequently, it is apparent that the appellants were entitled for the notification 08/2003-CE in respect of waste and scrap cleared by them - Thus, it is apparent that the Revenue has failed to make case that appellants are not entitled to any value based exemption notification and consequently, not entitled to avail 100% CENVAT Credit of duty paid on capital goods in the first year of receipt of goods. Appeal allowed - decided in favor of appellant.

Issues:
1. Confirmation of demand of reversal of CENVAT Credit on capital goods
2. Imposition of penalty under CENVAT Credit Rules, 2004
3. Invocation of extended period of limitation for duty demand
4. Eligibility for 100% CENVAT Credit on capital goods
5. Allegation of using brand name 'Shukla' for medical equipment
6. Entitlement to notification 08/2003-CE for waste and scrap clearance

Analysis:

1. The appeal was filed against the confirmation of demand for the reversal of CENVAT Credit taken on capital goods, along with interest and penalty under the CENVAT Credit Rules, 2004, read with section 11AC of the Central Excise Act, 1944. The appellant had availed 100% credit on capital goods received during 2010-11 to 2014-15 in the same year of receipt. However, a Show Cause Notice was issued demanding the reversal of 50% of the credit, claiming that only 50% could be availed in the year of receipt.

2. The appellant argued that even if they were not eligible for 100% credit in the first year, the balance 50% credit would have been available in the subsequent year, ensuring no loss of revenue. It was contended that only interest for the intervening period could be demanded. The appellant also clarified that they were manufacturing goods for export, except waste and scrap cleared domestically.

3. The Range Superintendent had inquired in 2012 about the credit availed, to which the appellant had responded citing entitlement under the CENVAT Credit Rules. The appellant maintained that they had not used the brand name 'Shukla' for any goods, whether for export or domestic market. They also highlighted that waste and scrap were cleared domestically after availing exemption under notification 08/2003-CE.

4. The Tribunal noted the Revenue's allegation of the appellant using the brand name 'Shukla' for exported medical equipment, which would disqualify them from notification 08/2003-CE and, consequently, from availing 100% CENVAT Credit on capital goods. However, the Tribunal found no evidence to support this claim. Additionally, the Tribunal observed that the appellant's clearance of waste and scrap within the prescribed limits under notification 08/2003-CE entitled them to the benefit, indicating the Revenue's failure to establish the appellant's ineligibility for the exemption.

5. Consequently, the Tribunal set aside the impugned order, as it found no substantiation for the Revenue's claims regarding the use of the brand name 'Shukla' and the appellant's entitlement to the exemption for waste and scrap clearance. The appeal was allowed, and the impugned order was deemed unsustainable.

This comprehensive analysis of the judgment addresses all the issues involved, detailing the arguments presented by both parties and the Tribunal's findings leading to the final decision.

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