Commissioner Of Central Excise vs M/S. Himachal Wire Indus P Ltd

Customs Excise and Service Tax Appellate Tribunal19 August 2015

CitationExcise Appeal No. 2762 & 3308 of 2006

Ratio decidendi

The rule this decision rests on

Where a manufacturer has taken Cenvat credit on inputs at a time when the final product was dutiable, and the final product later becomes exempt from duty, the manufacturer is not required to reverse that credit; the credit validly availed at the time of receipt of the inputs is not rendered liable to reversal by the subsequent exemption of the final product.

Written by Miss Lucy from the judgment below, not taken from a headnote.

Judgment

As delivered

IN THE CUSTOMS, EXCISE AND SERVICE TAXAPPELLATE TRIBUNAL, NEW DELHIPRINCIPAL BENCH, COURT NO. IIExcise Appeal No. 2762 & 3308 of 2006

[Arising out of Order-in-Appeal No. 434/CE/CHD/2006 dated 25.05.2006 and 617/CE/CHD/2006 dated 12.07.2006 both passed by the Commissioner of Central Excise, (Appeals), Chandigarh].

For approval and signature:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Hon'ble Shri B. Ravichandran, Member (Technical)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

Commissioner of Central Excise. Appellants

Chandigarh

Vs.

M/s. Himachal Wire Indus P Ltd Respondent

M/s. Brijsons Hetreat.

Appearance:

Shri R K Grover, DR for the Appellants

Shri Manish Pushkarna, Advocate for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Hon'ble Mr. B Ravichandran, Member (Technical)

Date of Hearing /decision: 19.08.2015

FINAL ORDER NO. 52743-52744 /2015-EX(DB)

Per Ashok Jindal:

Heard the parties.

2. The short issue involved in the matter is whether the respondent is required to reverse the Cenvat Credit which was taken earlier when their final product was liable to duty and later on it has become exempted.

3. The learned Commissioner (Appeals) allowed the cenvat credit and held that respondent is not required to reverse the credit as when they have taken the cenvat credit, their final product was dutiable. It is immaterial that it became exempted later on. The Revenue is aggrieved from the said observation of the Commissioner (Appeals), therefore Revenue is in appeal against the impugned orders.

4. The issue came up before the Honble High Court of Uttarakhand in the case of APCO Pharma Ltd. [2015 (319) ELT 641 (Uttarakhand)] wherein the Honble High Court has held that when the assessee has taken credit on inputs, the final product was dutiable, later on the final product became exempt, in that situation, assessee is not required to reverse the cenvat credit. Same is the situation in the case before us. In these circumstances, we do not find any infirmity in the impugned orders. Accordingly, same are upheld. The appeals filed by the Revenue are dismissed.

(Dictated and pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

( B Ravichandran )

Member(Technical)

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