9911796707
TMI Blog2023 (3) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... was a dutiable product falling under sub-heading No.3823.00 of the 1st Schedule to the Act, 1985. An inquiry was initiated by the department and it was observed that the main raw material for carrying out the manufacturing process of the exempted goods was raw oil which was firstly treated in a neutralizer, with phosphoric acid and caustic lye. Two different products namely, neutral oil and soap stock emerged from that stage. Neutral oil was further used in the manufacture of exempted goods and soap stock was consumed in manufacture of acid oil, which was a dutiable product. The respondent had availed facility of modvat credit of duty paid on inputs used in the manufacture of acid oil. It had filed a declaration dated 10.02.1998 under the Rule 57-G of the erstwhile Central Excise Rules, 1944 (for short "Rules, 1944") with the department, wherein the final product was mentioned as acid oil and inputs have been mentioned as, i) caustic soda lye/flakes ii) sulphuric acid and iii) phosphoric acid. In that declaration, no mention was made of Vanaspati Ghee and Refined Oil. It was revealed that phosphoric acid and caustic lye have been used in the manufacure of exempted as well as dutiab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g aggrieved, the department filed an appeal before the Tribunal and vide order dated 06.11.2006 the said appeal was dismissed. Thereafter, Central Excise Appeal No.70 of 2007 was filed by the department before this Court and vide order dated 29.03.2010, while setting aside the impugned order passed by the Tribunal, the case was remanded back to the adjudicating authority for deciding the same afresh. The matter was then adjudicated by the Commissioner, Central Excise Commissionerate vide order dated 23.06.2011 whereby demand of Rs.12,25,95,962/- by invoking the extended period of five years was confirmed and penalty of equivalent amount was imposed. 3. The respondent filed an appeal against the said order before the Tribunal. The said appeal had been allowed by the Tribunal vide order dated 25.04.2018 while holding that the demand of 8% of the value of exempted goods was not maintainable. The Tribunal had observed that the actual amount of cenvat credit availed on common inputs attributable to exempted products had already been reversed by the respondent and differential interest @24% per annum had already been deposited. It was also observed that though at the relevant time, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be set aside. 6. Per contra, it was argued by learned counsel for the respondent that the findings as given by learned Tribunal were well reasoned and did not warrant any interference. The respondent had reversed cenvat credit attributable to the common inputs used for manufacture of exempted final products and had also paid interest @24% per annum and had thereby met the requirement of scheme of retrospective amendment of Section 69 (2) of Finance Act, 2010 (for short 'Act, 2010') and, therefore, it was rightly held by the Tribunal that the demand of 8% of the value of exempted goods was not sustainable. 7. It would be proper to refer to certain relevant provisions. Rule 57-C of the Rules, 1944 laid down that no credit of the specified duty paid on the inputs used in the manufacture of a final product shall be allowed, if the final product is exempt from the whole of the duty of excise leviable thereon or is chargeable to nil rate of duty. Rule 57 CC of the Rules, 1944 (as it stood at the relevant time) made provision for adjustment of credit if final products were exempted. Under the said Rule, where a manufacturer was engaged in the manufacture of any final product w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Rs.4,51,574/- on proportionate basis in respect of the inputs used in the manufacture of exempted final products and also paid interest @24% per annum on the amount of reversed credit during the pendency of the appeal pending before the Tribunal earlier. By way of amendment in the Act, 2010, the Rules, 1944 were amended and Rule 57 CCC was inserted for reversal of actual credit by the manufacturer availing the credit of specified duty in respect of inputs used for manufacture of final product, which was chargeable to duty or chargeable to nil rate of duty by payment of amount equivalent to amount of credit attributable to inputs used in the manufacture of such final products. As per Section 69 of the Act, 2010, the amendment was retrospective in nature and a person opting to pay the amount in accordance with the provisions of Rules, 1944, was required to pay the same along with interest specified thereunder. 9. In this case, the respondent reversed cenvat credit attributable to the common inputs used for manufacture of exempted final products by meeting with the requirement of scheme of Section 69 (2) of the Act, 2010 which was retrospective in nature and also paid interest th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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