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of <h1>Tribunal rules in favor of assessees, rejects Revenue's appeal, grants credit amount</h1> <h3>MADRAS VANASPATI LTD. Versus COMMISSIONER OF C. EX., PONDICHERRY</h3> The Tribunal set aside the demand of Rs. 60,357, along with interest and penalty, as the reversal of 10% of the value of the exempted product was not ... - Issues:1. Appeal against demand of Rs. 60,357 on the ground of manufacturing dutiable and exempted products.2. Appeal filed by Revenue against extension of credit of Rs. 58,303 based on invoices from unregistered dealers.Analysis:1. The first issue in the appeal pertained to a demand of Rs. 60,357 on the grounds that the assessees were manufacturing both 'Vanaspati' (dutiable product) and 'Acid oil' (exempted by-product), requiring a reversal of 10% of the value of the exempted product. However, it was argued that as per Rule 6 of the Cenvat Credit Rules, the reversal is applicable only in the case of manufacturing both dutiable and exempted final products. The Tribunal referred to the Apex Court's decision in Commissioner of Central Excise v. Gas Authority of India Ltd. and concluded that since 'Acid oil' is a by-product and not a final product, Rule 6 does not apply. Consequently, the demand of Rs. 60,357, along with interest and penalty, was set aside.2. The second issue involved the appeal filed by the Revenue against the extension of credit of Rs. 58,303, which was based on invoices from unregistered dealers. The assessees claimed that the credit was availed based on invoices from M/s. KTV Oil Mills, establishing a link to the goods supplied to them. Despite the rejection of this argument due to the absence of the assessee's name on the invoices, the Tribunal found merit in the assessees' claim. By establishing a connection between the goods from M/s. KTV Oil Mills to M/s. Adani Exports Ltd. and then to M/s. Fortune Traders, who supplied the goods to the assessees, the Tribunal deemed the assessees eligible for the credit. Citing a precedent in Punjab Paint, Colour & Varnish Works (P) Ltd. v. Commissioner of Central Excise, Kanpur, the Tribunal upheld the extension of credit amounting to Rs. 58,303 to the assessees.In conclusion, the Tribunal upheld the impugned order, allowing the assessees the credit amount while rejecting the Revenue's appeal.
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