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M/s. Gem Granites Versus Commissioner of Central Excise, Belgaum

2016 (10) TMI 34 - CESTAT BANGALORE

100% EOU - Cenvat credit - High Speed Diesel - appellants vide Circular No. 799/32/2004 CX dated 23.09.2004 procured HSD on payment of duty and availed CENVAT Credit - appellant argued that facility of Cenvat Credit was extended to EOUs w.e.f. 06.09.2004 vide Notificaiton No. 18/2004-CE(NT) dated 06.09.2004 which amended Rule 17 of the Central Excise Rules, 2002 to enable EOUs to pay duty on clearances made to DTA by utilizing Cenvat Credit. Also Notification No. 22/2003 dated 31.03.2003 provide .....

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[2009 (7) TMI 605 - CESTAT, AHMEDABAD] and CCE vs. Jagmini Micro Knit Pvt. Ltd. [2008 (11) TMI 169 - CESTAT, NEW DELHI] make it clear that appellants as an EOU can claim CENVAT credit for the duty paid on HSD oil used as fuel and when they are eligible to avail the benefit of the said Notification. Therefore, the Revenue's contention that in terms of definition of input given in Rule 2(k) of CENVAT Credit Rules, 2004 the appellants are not entitled to claim CENVAT credit, cannot be accepted, wh .....

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lants and the respondents viz., Commissioner of Central Excise, Belgaum have been heard in detail. 2. The matter concerns with the demand of CENVAT credit taken on High Speed Diesel along with interest and imposition of penalty against the appellants viz., Gem Granites. 3. Appellants have been represented by learned advocate, Shri G. Shivadass, who inter alia submits as follows: * M/s. Gem Granites are 100% EOU. They manufacture cut and polished granites and are registered under Central Excise A .....

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D on payment of duty and availed CENVAT Credit of the duty paid thereon. * The appellants procured HSD falling under Chapter Sub heading No. 27101930 of the Central Excise Tariff Act, 1985 on payment of duty. The Appellants availed CENVAT Credit of the duty so paid on HSD and the same was reflected in the ER 2 returns. * The appellants further submit that Department issues them periodical show-cause notices proposing to disallow CENVAT credit and recall the CENVAT credit taken by the appellants .....

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2009 & September 2009 October 2009 & December 2009 January 2010 to December 2010 2. Appeal No. E/1541/2010 E/2091/2010 E/481/2012 3. Show Cause Notice No. 13/2010 dated 02.02.2010 50/2010 dated 26.04.2010 20/2011 dated 11.03.2011 4. Order in Original No. 04/2010 dated 15.04.2010 11/2010 dated 29.06.2010 19/2011 dated 30.11.2011 5. Amount Demanded ₹ 90,32,688/- ₹ 51,46,704/- ₹ 91,66,176/- 6. Penalty Imposed ₹ 7,50,000/- ₹ 3,50,000/- ₹ 2,00,000/- 3.1 Th .....

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ment of duty. In view of the above, the Appellants became eligible to avail Cenvat Credit of the duty paid on inputs and to utilize the same for payment of duty on clearances made to DTA. ii. Rule 2(k) of the Cenvat Credit Rules, 2004 provided that goods used as fuel shall be treated as inputs and the duty paid on the same shall be available as Cenvat Credit. The Appellants submit that the HSD procured by them was used by them as fuel in their earth moving equipment/ excavators etc., in their ma .....

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use as fuel without payment of duty in terms of the Notifcation. Reliance is placed on Indian Oil Corporation Limited Vs CCE [2008 (230)ELT 177 (Tri. Chennai)]. iv. The Appellants submit that for the purpose of extending the benefit of Notification in respect of goods procured by an EOU, the courts have taken a view that HSD oil would be considered as Fuel and the said interpretation have been adopted by the court while extending the benefit of Notification No. 22/2003 CE dated 31.03.2003. v. Th .....

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intent that duty incidence on procurements of EOU be Nil. Here the EOU procures HSD on payment of duty, the supplier is extended deemed export drawback in terms of Para 8.3 of the FTP. Therefore, where the supplier has not availed the deemed export drawback, the EOU would be entitled to avail CENVAT Credit of the duty paid on HSD and utilise the same towards payment of duty in terms of Rule 17 of the Central Excise Rules or claim refund of the unutilised Credit. vii. In view of the above, it is .....

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d) DCCE, Chennai vs. Dorcas Market Makers Pvt. Ltd.: 2015 (321) E.L.T. 45 (Mad.) affirmed by Supreme Court in 2015 (325) E.L.T. A104 (S.C.) e) JK Tyre & Industries Ltd. in Appeal No.E/493/2011: Interim Order No.59/2016 dated 29.2.2016. 3.3 The appellants emphasize that along with entitlement of CENVAT credit as per the Circular No.799/32/2004-CX dated 23.9.2004 issued by CBEC they were entitled to claim the refund for unutilized CENVAT credit under Rule 5 of CENVAT Credit Rules as an EOU. T .....

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.L.T. 145 (S.C.) (ii) Imperial Granites (P) Ltd. vs. CCE, Guntur: 2012 (276) E.L.T. 174 (AP) (iii) Imperial Granites P. Ltd. vs. CCE, Guntur: 2010 (256) E.L.T. 610 (Tri.-Bang.) 5. We have carefully considered the full facts of the case and submissions of both the sides and the case laws cited. 6.1 The main issue concerns with the CENVAT credit taken by the appellants who are a 100% EOU. The Revenue s contention is that appellant is not entitled to take CENVAT credit as the definition of input gi .....

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