2019 (4) TMI 990 - AT - Central Excise

Utilization of CENVAT Credit - Rule 3(7)(b) of Cenvat Credit Rules, 2004 - whether the AED(GSI) paid after 01.04.2000, Can the respondent utilized the same for payment of BED/SED or not? - HELD THAT - It has been held by the Hon ble Apex Court in COMMISSIONER OF C. EX., GOA AND CHENNAI VERSUS MRF LTD. 2005 (1) TMI 110 - SUPREME COURT OF INDIA that they are not liable to pay AED(GSI). Therefore, whatever duty paid on account of AED(GSI) by the appellant is not AED(GSI), therefore, the respondent is entitled to avail cenvat credit of the same. It is fact on record, the appellant has paid AED(GSI) through debit entry on 31.12.2004 and the said explanation allowed the AED(GSI) paid on or after 01.04.2000 can be utilized towards payment of basic excise duty or special excise duty. Therefore, the respondent is correctly availed the cenvat credit of AED(GSI) which has been used for payment of basic excise duty/special excise duty. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Interpretation of Rule 3(7)(b) of the Cenvat Credit Rules, 2004 regarding utilization of Additional Duty of Excise (GSI) paid before 01.04.2000.
2. Correct classification of Rubberized Tyre Cord Fabric under the Central Excise Tariff Act, 1985.
3. Validity of utilizing cenvat credit of AED(GSI) for payment of Basic Excise Duty and Special Excise Duty.

Analysis:

1. The case involved a dispute regarding the utilization of Additional Duty of Excise (GSI) paid before 01.04.2000 by the respondent, a tyre manufacturer. The Revenue contended that the credit accrued before 01.04.2000 could not be used for payment of Basic Excise Duty (BED) and Special Excise Duty (SED) as per Rule 3(7)(b) of the Cenvat Credit Rules, 2004. The Revenue issued a show cause notice for recovery of the cenvat credit utilized by the respondent. The Ld. Commissioner initially dropped the proceedings, leading the Revenue to appeal.

2. The Respondent argued that the correct classification of Rubberized Tyre Cord Fabric was under Heading No. 59.06, not subject to AED(GSI) as per the decision of the Hon'ble Supreme Court. The Respondent reversed the cenvat credit after an adjudication order, claiming that they were not liable to pay AED(GSI). The Respondent relied on a previous Tribunal decision and a High Court order in their favor. The Respondent maintained that the cenvat credit was correctly utilized for BED and SED payment.

3. Upon hearing both parties, the Tribunal considered whether the AED(GSI) paid after 01.04.2000 could be used by the respondent for BED/SED payment. The Tribunal found that the Hon'ble Apex Court had ruled that the respondent was not liable to pay AED(GSI). Therefore, the duty paid by the appellant was not AED(GSI, allowing the respondent to avail cenvat credit. The Tribunal referenced the explanation to Rule 3(7)(b) of the Cenvat Credit Rules, 2004, stating that AED(GSI) paid after 01.04.2000 could be used for BED/SED payment. As the appellant paid AED(GSI) after 01.04.2000 and utilized it for BED/SED, the Tribunal upheld the respondent's position. Consequently, the impugned order was upheld, and the Revenue's appeal was dismissed.