Cce, Chennai I vs Hindustan Petroleum Corporation Ltd
- Case No.Appeal No. E/482/2005
Ratio decidendi
The rule this decision rests on
A principal manufacturer who sends inputs to a job worker is required by law to reverse the CENVAT credit on those inputs on the date of dispatch; a failure to do so attracts a penalty. Where the principal manufacturer, through confusion as to the position of law, neither reversed the credit nor paid interest on the credit so enjoyed, and subsequently deposited the equivalent amount on demand, the Tribunal held that it is entitled to refund of the amount deposited without interest, the refund being confined to the peculiar facts and circumstances of the case and not to operate as a precedent.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
(Arising out of Order-in-Appeal No. 27/2005 (M-I) dated 28.2.2005 passed by the Commissioner of Central Excise (Appeals), Chennai)
CCE, Chennai I Appellant
Vs.
Hindustan Petroleum Corporation Ltd. Respondent
Appearance
Shri K.P. Muralidharan, AC (AR), for the Appellant Shri M.N. Bharathi, Advocate (AR) for the Respondent
CORAM
Honble Shri D.N. Panda, Judicial Member
Date of Hearing / Decision: 08.05.2015
Final Order No. 40521 / 2015
The short question in this appeal is whether CENVAT credit not reversed by the principal manufacturer in respect of the inputs sent to the job worker and the latter not taken credit thereof shall entitle the principal manufacturer to the refund of any amount paid at a subsequent date without reversing the CENVAT credit on the date of dispatch of the input to the job worker.
2. There is no dispute of reversal of CENVAT credit on the input issued to job worker as required by law. There is also no dispute that the respondent utilized the CENVAT credit in respect of the input although that was reversible on dispatch to the job worker. There is also no dispute that on demand the equivalent amount of CENVAT credit was deposited by the respondent. The amount so deposited was also appropriated against the demand of Rs.10,79,018/- pertaining to the same CENVAT credit.
3. In view of the above, law having prescribed that reversal of CENVAT credit by principal manufacturer is requirement when the goods are sent to job worker failing to do so, the appellant is required to deposit the penalty. Therefore, penalty of Rs.5,000/- imposed by learned adjudicating authority is confirmed.
4. Without reversal when the appellant has enjoyed the CENVAT credit it is liable to interest thereon till payment by challan what that is averred. It appears that due to confusion of the position of law, there was no reversal and subsequent payment was made. Therefore, neither appellant will ask any interest nor the respondent shall ask any interest from Revenue. Respondent is entitled to the refund of the amount of Rs.10,79,018/- deposited by it without interest in the peculiar facts and circumstances of the case.
5. It is made clear that this order shall not be a precedent since this has been passed on the given facts and circumstances of the case.
6. In the result, the order of the Commissioner (Appeals) is modified to the extent above and disposed.
(Dictated and pronounced in open court)
(D.N. Panda) Judicial Member
Rex
2
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