2024-VIL-1489-CESTAT-KOL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – Reversal of Cenvat credit, Manufacture of exempted goods - Demand of 5%/6% of the value of the exempted goods - The Tribunal in its earlier order had remanded the matter to the Adjudicating Authority and directed that the appellant is required to reverse the common Cenvat Credit to the extent that the same pertains to the exempted goods - The Adjudicating Authority concluded that the appellant had correctly worked out the amount of inputs used for manufacturing duty-exempted final products and that the demand of 5/6% of the value of the exempted goods was not legally sustainable. The Revenue appealed against the order - Whether the Adjudicating Authority was correct in accepting the Cenvat Credit reversal by the appellant and dropping the balance demand – HELD - the Adjudicating Authority has followed the directions of the earlier Tribunal order and applied the ratio of the relevant case laws, including the Supreme Court judgment in Chandrapur Magnet Works (P) Ltd. v. CCE, Nagpur, wherein it was held that once Cenvat credit is reversed, it is to be considered ab initio not availed - the Adjudicating Authority had verified the documents and the Cost Accountant's Certificate and found that the appellant had correctly worked out the amount of inputs used for manufacturing duty-exempted final products – Tribunal relied on the decision in Mercedes Benz India (P) Ltd. Vs. Commr. of C. Ex., Pune-I, wherein it was held that reversal of Cenvat Credit in respect of the common inputs would be sufficient, and the demand made under 5/6% value of the exempted goods is not legally sustainable - the appeal filed by the Revenue is dismissed by upholding the order of the Adjudicating Authority
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