2019 (6) TMI 121 - AT - Central Excise

Rectification of Mistake - CENVAT Credit - N/N. 14/97-CE (NT) dated 03.05.1997 - HELD THAT - The issue involved relates to Notification No. 14/1997-CE (NT), restricting the admissibility of Cenvat credit in certain circumstances. Notification No. 14/97-CE (NT) dated 03.05.1997 was held to be illegal by the High Court of Gujarat, Hon'ble High Court in the case of GUJARAT NARMADA VALLEY FERTILIZER CO. LTD. VERSUS UNION OF INDIA 2012 (12) TMI 1117 - GUJARAT HIGH COURT . In the instant case, there is no dispute that duty has been paid at the rate 15% ad-valorem. It is seen that in the absence of the benefit of ratio of the decision of the Hon'ble High Court in the case of GUJARAT NARMADA VALLEY FERTILIZER CO. LTD. VERSUS UNION OF INDIA 2012 (12) TMI 1117 - GUJARAT HIGH COURT came to a contrary conclusion. ROM Application allowed.

Summary

Issues involved:
1. Consideration of ROM application based on a binding precedent.
2. Interpretation of Notification No. 14/1997-CE (NT) regarding admissibility of Cenvat credit.

Analysis:
1. The ROM application was filed by M/s. Indian Oil Corporation Limited concerning order No. A/10489/2019. The appellant's counsel argued that a decision by the Hon'ble High Court of Gujarat, which was not submitted during the final hearing but later, should be considered as a binding precedent. The counsel relied on the case of Gujarat Narmada Valley Fertilizers Company Limited vs. UOI – 2017 (345) ELT 50 (Guj.) to support the argument for the ROM application to be considered. The Assistant Commissioner representing the respondent relied on the order, leading to the Tribunal's examination of the issue.

2. The main issue revolved around the interpretation of Notification No. 14/1997-CE (NT) and its impact on the admissibility of Cenvat credit under certain circumstances. The High Court of Gujarat in the case of Gujarat Narmada Valley Fertilizer Company Limited vs. UOI – 2017 (345) ELT 50 (Guj.) had declared the said notification illegal in cases where full excise duty at the rate of 15% was paid, limiting the Modvat credit to the extent of excise duty calculated at the rate of 10% ad valorem. This decision was considered a binding precedent. In the present case, where duty had been paid at the rate of 15% ad-valorem, the Tribunal had initially reached a different conclusion in order No. A/10489/2019 dated 13.03.2019. However, upon considering the binding precedent set by the High Court's decision, the Tribunal allowed the ROM application and set aside the demand, ultimately allowing the appeal.

In conclusion, the judgment by the Appellate Tribunal CESTAT AHMEDABAD in the case of M/s. Indian Oil Corporation Limited provided a detailed analysis of the issues surrounding the consideration of a ROM application based on a binding precedent and the interpretation of Notification No. 14/1997-CE (NT) regarding the admissibility of Cenvat credit. The Tribunal's decision was influenced by the High Court of Gujarat's ruling, emphasizing the importance of legal precedents in shaping the outcome of the case.