2025-VIL-2011-CESTAT-MUM-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – Clearance of exempted Goods, Reversal of CENVAT Credit – Appellant is manufacturer of pressure cookers and also dealt with idli stands. For the period up to February 2011, idli stands were exempted from duty of central excise, and for the period thereafter, they were eligible to be cleared on payment of duty of 1%/2% subject to non-availment of credit on 'inputs' and 'input service' – Dept alleged that the appellant had availed CENVAT credit of services used in common for the exempted idli stands, contrary to the stipulation in rule 6 of CENVAT Credit Rules, 2004 - Whether the appellant is liable to restrict the exercise of options for reversal of CENVAT credit determined by the central excise authorities – HELD - The appellant could not be compelled to restrict the exercise of the options for reversal determined by the central excise authorities. The appellant had volunteered to discharge the liability in terms of rule 6(3) of CENVAT Credit Rules, 2004, and their submissions in this regard had not been considered by the original authority – Further, for the period up to February 2011, when the idli stands were not liable to duties of central excise, the appellant could not be considered as the 'manufacturer' of the exempted goods. The raw materials were supplied by the appellant to the 'contractor', and the manufacturing was not carried out by the appellant. In such circumstances, the relationship between the appellant and the 'contractor' could not be designated as 'job-worker', as the essential requirement of the contractual arrangement including the assumption of responsibility by the appellant for the discharge of duty liability was not present - the recovery ordered for the period up to February 2011 is set aside absolutely and entirely, and for the period thereafter, subject to the submissions of the appellant, is to be recomputed and other consequential detriments to be re-determined in terms of settled law and provisions of Rule 15 of CENVAT Credit Rules, 2004 – The appeal is disposed of
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