2012 (8) TMI 934 - HC - Central Excise

Summary

Issues Involved:
The judgment involves the issue of availing cenvat credit and concessional rate of duty under Notification No. 06/2002-CE, as well as the reversal of cenvat credit by the manufacturer.

Summary:

Issue 1 - Availing of Cenvat Credit and Concessional Rate of Duty:
The respondent, engaged in the manufacture of ceramic glaze tiles, had availed cenvat credit of duty paid on inputs used for fabrication of capital goods, while simultaneously availing the benefit of exemption under Notification No. 06/2002-CE and paying a concessional rate of duty on the Glaze Ceramic Tiles. The Revenue contended that since the respondent had availed credit of duty paid on inputs under Rule 3 of the Cenvat Credit Rules, the exemption under the notification was not admissible for clearances of the final product from 2004-2005. The respondent was accused of mis-declaration and wrongly availing the benefit of exemption to evade payment of central excise duty. Consequently, a show cause notice was issued, and a demand for differential duty was raised, along with interest and penalties under the Central Excise Act, 1944.

Issue 2 - Reversal of Cenvat Credit:
The appeal filed by the Excise Department challenged the order of the Tribunal, which had set aside the demand raised by the Commissioner. During the appeal process, it was revealed that the respondent had actually reversed the cenvat credit taken, contrary to the initial observation made at the time of admission. A letter produced by the department clarified this fact, indicating that the respondent had reversed the cenvat credit. Consequently, the question framed by the Division Bench did not require an answer, and the Tax Appeal was disposed of in line with a previous judgment by the Court.

In conclusion, the judgment addressed the issues of availing cenvat credit, concessional rate of duty, and the reversal of cenvat credit, ultimately leading to the disposal of the Tax Appeal based on the clarified facts regarding the reversal of cenvat credit by the manufacturer.