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M/s Mahindra And Mahindra Ltd. Versus Commissioner of Central Excise, Jaipur-I

2016 (8) TMI 436 - CESTAT NEW DELHI

Whether or not the appellants are liable to pay an amount equal to 10% of the value of tractors of engine capacity below 1800 CC when they have availed Cenvat credit of educational cess on common inputs without maintaining separate records - Held that:- in the present case there is no credit of Central Excise duty availed by the appellants on the common inputs. The only credit availed is education cess paid on such common inputs. The final products are of two categories - tractors with engine ca .....

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is found that there is no dispute on the fact of such reversal which has been admitted in the show cause notice itself. In spite of such reversal, the appellants were called upon to pay an amount equal to 10% of the total price of exempted tractors invoking Rule 6(3)(b) of the Cenvat Credit Rules, 2004. Therefore, such a demand is not legally sustainable as already held in various decisions of this Tribunal and as affirmed by the Hon'ble Supreme Court. - Decided in favour of appellant - Excise A .....

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uts used by them in the manufacture of tractors. The tractors manufactured by the appellants are exempted from payment of excise duty vide Notification No. 23/2004-CE dated 09/07/2004. However, a cess of 1/8% adv. is leviable in terms of notification issued under Industries (Development and Regulation) Act, 1951, in respect of tractors having engine capacity of above 1800 CC. Tractors having engine capacity less than 1800 CC are not liable to such cess. Appellants are engaged in manufacture of b .....

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ts filed this appeal. 2. The learned Counsel for the appellant Shri Amit Jain submitted that the impugned order is legally unsustainable, lacking in judicial discipline and contrary to various judgments of the Tribunal. All the tractors manufactured by the appellants are exempted from Central Excise duty. Industrial cess is leviable on the tractors with engine capacity of above 1800 CC and accordingly Education cess of 2% on such industrial cess is payable in terms of Section 93 of the Finance A .....

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capacity below 1800 CC which do not attract industrial cess as well as education cess. They have reversed an amount of ₹ 7,17,581/- as proportionate credit of education cess for the period July 2004 to August 2005 attributable to the tractors below 1800 CC. This fact has been admitted in the show cause notice issued by the Department. Such being the fact, there is no justification at all to demand 10% of amount on the value of tractors (below 1800 CC) invoking Rule 6 of the Cenvat Credit R .....

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ule 6 and reversal, if any, subsequent to the clearance of exempted goods will not be considered as sufficient compliance of the said provisions. He submitted that the impugned order correctly invoked the provisions of Rule 6 (3) (b). 4. We have heard both the sides and examined the appeal records. The point for decision in this appeal is whether or not the appellants are liable to pay an amount equal to 10% of the value of tractors of engine capacity below 1800 CC when they have availed Cenvat .....

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all, we noticed that in the present case there is no credit of Central Excise duty availed by the appellants on the common inputs. The only credit availed is education cess paid on such common inputs. The final products are of two categories - tractors with engine capacity of above 1800 CC or below 1800 CC. Industrial cess is leviable on the tractors with capacity of above 1800 CC. Education cess is payable on such industrial cess. The appellants utilized the credit of education cess availed on .....

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ractors invoking Rule 6 (3) (b) of the Cenvat Credit Rules, 2004. We find such a demand is not legally sustainable as already held in various decisions of this Tribunal and as affirmed by the Hon'ble Supreme Court. 5. The Hon'ble Supreme Court in Chandrapur Magnet Wires (P) Ltd. vs. CCE, Nagpur reported in 1996 (81) E.L.T. 3 (S.C.) held that if the debit is made of the credit availed earlier it will amount to non-availment of such credit. We find though the Original Authority examined th .....

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