2011 (6) TMI 596 - AT - Central Excise

Appellate tribunal upholds Commissioner's order on Cenvat credit for dutiable and exempted products

Commissioner of Central Excise, Aurangabad Versus Pepsico India Holdings Pvt Ltd.,

The appellate tribunal affirmed the Commissioner (Appeals) order upholding the lower adjudicating authority's decision on the availing of Cenvat credit ... Cenvat credit - Department initiated proceedings against the respondent for using common inputs for both the dutiable and exempted products. Since they were no separate inventory maintained for such products, the lower adjudicating authority confirmed the demand – Rule 6 of Cenvat Credit Rules, 2001/2002/2004 have been amended by Financial Act, 2010 - Held that:- appellant have reversed the total Cenvat credit availed on inputs which were used for both the final products dutiable as well as exempted products and the total period is covered under the amended law - Revenue's appeal is dismissed Issues:Revenue's appeal against order-in-appeal upholding lower adjudicating authority's decision on Cenvat credit for dutiable and exempted products.Analysis:The case involved an appeal by the Revenue against an order-in-appeal that upheld the lower adjudicating authority's decision regarding the availing of Cenvat credit by the respondent for both dutiable and exempted products. The respondent, engaged in manufacturing excisable goods, had utilized common inputs for both types of products without maintaining separate inventory. The lower adjudicating authority confirmed a demand for inadmissible Cenvat credit on inputs, which was partially dropped, leading to the Revenue's appeal.The main contention of the department was that the respondent failed to reverse a portion of the total price of the exempted final products as required by Rule 6 (3) (b) of the Cenvat Credit Rules, 2002. On the other hand, the respondent argued that they had reversed the total Cenvat credit availed on inputs used for both dutiable and exempted products. They highlighted the retrospective amendment of Rule 6 by the Financial Act, 2010, which allowed manufacturers to pay an amount equivalent to the Cenvat credit attributable to inputs used in the manufacture of exempted goods. The total period of the case fell under the amended rule, which was not contested by the department.The appellate tribunal noted that the respondent had indeed reversed the total Cenvat credit availed on inputs for both types of products, as required by the amended law covering the period in question. With no dispute over the facts presented and the law applied, the tribunal found no reason to interfere with the lower authorities' concurrent findings. Consequently, the Commissioner (Appeals) order upholding the lower adjudicating authority's decision was affirmed, and the Revenue's appeal was dismissed.