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2021 (4) TMI 1184 - AT - Central ExciseReversal of CENVAT Credit - goods are cleared to National Electricals Equipments Corporation, Jaipur who in turn uses these goods for manufacture of goods to be exported - exempt goods as per N/N. 43/2001-C.E. (N.T.) dated 26/06/2001 or not - HELD THAT - Similar issues has been examines in various decisions of Tribunal and higher forums. In the case of COMMISSIONER OF CENTRAL EXCISE, LUDHIANA VERSUS AARTI STEELS LTD. 2004 (2) TMI 397 - CESTAT, NEW DELHI , alloy and non alloy steel wires cleared under CT-2 certificate to cycle tyre manufacturers who exported goods at Nil rate of duty where the MODVAT credit was allowed - The said decision of Tribunal was upheld by Hon ble Supreme Court reported at COMMISSIONER VERSUS AARTI STEELS LTD. 2004 (1) TMI 725 - SC ORDER . The clearances made by appellant under notification 43/2001-CE (N.T.) on the strength of Annexure 45 cannot be held as exempted clearances and therefore, no reversal of Cenvat Credit is necessary - appeal allowed - decided in favor of appellant.
Issues:
Appeal against reversal of Cenvat Credit under Rule 6(3) of the Cenvat Credit Rules, 2004. Analysis: The appeal was filed against the demand for reversal of Cenvat Credit under Rule 6(3) of the Cenvat Credit Rules, 2004. The appellant, M/s Ram Ratan Wires, and Shri Sunil Rathi, Manager of the appellant firm, filed the appeal. However, during the proceedings, no one appeared on behalf of the appellant. The issue at hand revolved around the clearance of goods under notification 43/2001-C.E. (N.T.) for use in the manufacture of goods to be exported. The goods were cleared to a specific entity, National Electricals Equipments Corporation, Jaipur, who further utilized them in the manufacture of goods for export. This scenario was compared to similar cases previously examined by the Tribunal and higher forums. Reference was made to a case involving alloy and non-alloy steel wires cleared under CT-2 certificate to cycle tyre manufacturers who exported goods at a nil rate of duty. The Tribunal had previously allowed Modvat credit under similar circumstances, which was upheld by the Hon'ble Supreme Court. The judgment emphasized that the goods cleared under specific certificates were neither exempted nor chargeable to nil duty, thus not necessitating the reversal of Cenvat Credit under Rule 6 of CCR, 2004. In another case, the issue of the reversal of Cenvat credit under Rule 6 was addressed concerning the clearance of sulphuric acid to manufacturers of fertilizers under CT-3 Certificate/bond. The judgment highlighted that the final product, sulphuric acid, was dutiable and not exempted, therefore not requiring the reversal of credit. The decision referenced previous cases to support the argument that goods cleared under specific procedures were not exempted or chargeable to nil duty, hence Rule 6 of CCR, 2004 did not apply. Consequently, the impugned order demanding the reversal of credit was set aside, and the appeal was allowed with consequential relief if any. The judgment emphasized that the clearances made under the mentioned notification could not be considered as exempted, leading to the allowance of the appeal. Additionally, the appeal against the imposition of a penalty was also allowed based on the aforementioned decisions and analysis.
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