Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2023 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (4) TMI 604 - AT - Central ExciseMODVAT Credit - Process amounting to manufacture or not - purchase of item Chloropyriphos falling under chapter heading 3808.10 of Central Excise Tariff Act, 1985 - said products was purchased in bulk and repacked in the factory of production in smaller packs of different sizes - Chloropyriphos so purchased in bulk can be regarded as input in terms of Rule 57 A of Central Excise Rules, 1944 or not - reversal of MODVAT Credit under erstwhile Rule 57I of Central Excise Rules, 1944 read with Section 11A of the Central Excise Act, 1944. HELD THAT:- The appellant are engaged in the activity of repacking of the insecticide Chloropyriphos purchased in bulk, into smaller retails packs and cleared the same under the appellant’s brand on payment of excise duty. It is also not disputed that during the impugned period process of repacking of the said goods does not amount to manufacture. Therefore, the issue before us is that whether the MODAVT/CENVAT credit taken by the appellants on Chloroypyriphos which were cleared by them on payment of duty, after the process of re-packing and affixing their brands is legally correct or not. The appellant have paid more duty than the credit availed after value addition. When duty paid at the time of clearance equal to or higher than the credit availed, the same is to be treated as reversal of credit. Therefore, no further reversal of credit is required as held by Tribunal in number of cases. Such payment of duty that too in excess of the credit availed tantamount to reversal of credit and there is no need to once again reverse the Modavt/Cenvat credit taken - In a similar situation, the Hon’ble Apex Court in the case of COMMISSIONER OF C. EX. & CUS., VADODARA VERSUS NARMADA CHEMATUR PHARMACEUTICALS LTD. [2004 (12) TMI 93 - SUPREME COURT] held that when Cenvat credit wrongly availed is exactly equivalent to the amount of duty paid, the consequence is revenue neutral and hence the demand for such wrong availment of credit is not sustainable in law. The ratio of this judgment squarely applies to the facts of the present case. The duty paid by the appellants has been accepted by the department which is admittedly more than the Modavt/CENVAT credit availed by the appellant. Therefore, following the various judicial pronouncements as relied upon by the appellant, the appellant are not required to reverse the credit. Appeal allowed.
|