2026-VIL-946-CESTAT-CHE-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Cenvat credit reversal on common input services used in manufacture of exempted goods exported under DEPB scheme - While computing the value of exempted goods for reversal of attributable Cenvat credit on input services, the appellant excluded the value of export goods cleared under exemption N/No. 30/2004-CE and goods cleared to job work, instead including them under dutiable clearance - SCN proposing reversal of Cenvat credit - Whether the appellant is required to reverse the credit attributable to common input services used in or in relation to the manufacture of exempted goods without taking into consideration the value of cotton yarn cleared for export without payment of duty under DEPB scheme - Whether the value of cotton yarn cleared for job work has to be considered for reversal of credit - HELD - Relying on the precedent decision of Sri Shanmugavel Mills and the judicial pronouncement in Drish Shoes Ltd., is it held that an assessee manufacturing goods chargeable to nil duty is eligible to avail Cenvat credit paid on inputs used in the manufacture of such goods if the goods are exported, following the exception clause to the Cenvat Credit Rules - Regarding job work clearances, since the appellant has already included the value of goods cleared under the category of exempted goods for working out the quantum of credit to be reversed, including the value of goods cleared for job work would amount to double jeopardy and is not sustainable in law. The appellant has submitted ER-1 returns showing job work turnover filed regularly with the range and available in the ACES system, and verification should have been done during the initial adjudication stage rather than at the appellate level - The impugned order is set aside and the appeal is allowed
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