2015 (10) TMI 2650 - AT - Central Excise

Appeal allowed, appellant entitled to utilize unutilized credit balance.

M/s Rattan Vanaspati Ltd. Versus Commissioner of Central Excise, Meerut

M/s Rattan Vanaspati Ltd. Versus Commissioner of Central Excise, Meerut - TMI Issues:Appeal against Order-in-Appeal dated 22.02.2006 - Accumulated money credit scheme under Central Excise Rules - Rescission of notification affecting credit balance - Demand raised for unutilized credit balance - Penalty imposed for violation of rules - Appeal to Tribunal.Analysis:Issue 1: Accumulated Money Credit Scheme under Central Excise RulesThe Appellant, engaged in manufacturing vegetable products under chapter 15 of Central Excise Tariff Act, availed the benefit of a money credit scheme as per provisions under rule 57K to 57P of the erstwhile Central Excise Rules 1944. The scheme allowed for specified input credit on minor oils, which could be used for clearance of final products subject to certain conditions. The scheme was rescinded and reintroduced multiple times, affecting the appellant's credit balance.Issue 2: Demand Raised for Unutilized Credit BalanceUpon the imposition of excise duty on vegetable products, the appellant's unutilized credit balance of Rs. 35,15,643/- was questioned by the revenue, asserting that the credit had lapsed. A show cause notice was issued, demanding the utilization of the credit balance and proposing penalties for rule violations.Issue 3: Legal Interpretation and PrecedentsThe appellant contended that the credit was a vested right that could not lapse due to the rescission of the notification. Citing the ruling of the Gujarat High Court and the Supreme Court in similar cases, it was argued that manufacturers were entitled to use the accumulated money credit in the future, even after the scheme's rescission.Issue 4: Tribunal's DecisionAfter considering the arguments, the Tribunal found in favor of the appellant, relying on the precedents set by the High Court and the Supreme Court. It held that the appellant was entitled to utilize the unutilized credit balance as it had not lapsed. The appeal was allowed, setting aside the impugned order and granting consequential benefits to the appellant in accordance with the law.In conclusion, the Tribunal's judgment favored the appellant, recognizing the vested right in the accumulated money credit scheme and allowing the utilization of the unutilized credit balance despite the rescission of the notification. The decision was based on legal interpretations and precedents establishing the entitlement of manufacturers to use such credits even after changes in the schemes.