2023 (10) TMI 422 - AT - Central Excise

Reversal of CENVAT Credit - exempted goods are cleared or exported to EOU or to SEZ - seeking reversal alongwith interest - Clearances of exempted goods in DTA, paying 10% amount - penalties In respect of Rs.15,59,640/- - HELD THAT - The Revenue is admitting that the amount has already been paid but insisting that the interest is required to be paid on this amount. In respect of Rs.29,61,191/- already reversed by the Appellant, Revenue admits that interest of Rs.1,47,209/- has already been paid. The interest amount paid is not being disputed on account of any quantification. In respect of Rs.74,64,464/- - HELD THAT - The AR s Office has queried the details from the Jurisdictional Commissioner to get it verified as to whether 10% of the value of the clearance of the exempted goods was being paid by the Appellant, as claimed by them. They have received letter dated 21.06.2013 from the Office of the Commissioner, Visakhapatnam, stating that the Assessee has reversed 10% of the value of clearances. This letter has been annexed with the synopsis submitted by the Revenue. Interest amount - HELD THAT - In respect of the interest of Rs.29,61,191/-, the same stands paid by the Appellant. Since the Appellant has not brought in any evidence to the effect that they were carrying sufficient balance, we reject their submission that interest is not required to be paid. The interest of Rs.1,47,209/- paid by them meets the requirement of interest as demanded in the OIO - Similarly, in respect of Rs.15,59,640/-, since the AR s Office has received confirmation about payment of the same and the Appellant is not contesting the same, no Appeal lies from the Appellant s side on this count. However, they are required to pay the interest on this amount. Clearances of exempted goods in DTA, they have paid 10% amount - HELD THAT - This fact has been verified by the Revenue and the Jurisdictional Authorities have confirmed that this is correct. Therefore, once the Appellant pays the 10% amount on the clearance of exempted goods, the demand of Rs.74,64,464/- would amount to once again demanding reversal of the Cenvat credit which is legally not permissible. Therefore, Appeal allowed to the extent that the confirmed demand of Rs.74,64,464/- is set aside. Penalties - HELD THAT - Since the issues involved are that of interpretation and almost the entire duty demands have been dropped at the first stage itself and even the balance confirmed demand is being set aside now, the penalties are set aside. Appeal disposed off.

Summary

Issues involved:
The issues involved in the judgment include the reversal of Cenvat credit, payment of interest on reversed amounts, and the demand for reversal of Cenvat credit on certain inputs used in the manufacture of exempted goods.

Reversal of Cenvat credit:
The Appellants were issued four Show Cause Notices seeking reversal of Cenvat credit for specific periods and amounts. The Adjudicating Authority passed an order dropping certain demands based on a previous Tribunal decision. However, demands related to the reversal of Cenvat credit on specific inputs were upheld.

Payment of interest on reversed amounts:
The confirmed demand in the Order-In-Original (OIO) included the requirement for the payment of interest on amounts already reversed by the Appellant. The Appellants contested the need for interest payment on certain reversed amounts, citing sufficient balance in their Cenvat credit account.

Demand for reversal of Cenvat credit on specific inputs:
A demand was made for the reversal of Cenvat credit on Tri Ethyl Amine, an input used in the production of both dutiable and exempted goods. The Appellants argued that they had been paying the required duty on clearances of exempted goods, making the demand for reversal of Cenvat credit on this input unjustified.

Judgment:
After considering the arguments and documentary evidence presented by both sides, the Tribunal made the following determinations:
- Interest is required to be paid on certain reversed amounts, with the interest already paid by the Appellant deemed sufficient in one case.
- The demand for reversal of Cenvat credit on Tri Ethyl Amine was set aside, as the Appellant had been paying the necessary duty on clearances of exempted goods.
- Penalties were set aside due to the interpretation of the issues and the dropping of most duty demands.

Conclusion:
The Tribunal disposed of the Appeal by upholding the requirement for interest payment on certain amounts, setting aside the demand for reversal of Cenvat credit on specific inputs, and waiving penalties due to the dropping of most duty demands.