2014 (8) TMI 405 - AT - Central Excise

Tribunal dismisses appeals on Cenvat credit & duty demand, clarifies Central Excise Rules

M/s. Mohan Breweries & Distilleries Ltd. Versus Commissioner of Central Excise, Pondicherry

The Tribunal dismissed both appeals filed by the appellant and the Revenue, concerning the availing of Cenvat credit on inputs, including Furnace Oil, the ... CENVAT Credit - Whether duty paid on the Furnace Oil used as input could be availed of as credit under Modvat scheme as envisaged under Rule 57B of the erstwhile Rules - Held that:- in terms of Rule 57B as amended, the appellant would be entitled to take credit in respect of Furnace Oil for the amount actually paid on account of specified duty during the period Mar.’97 to Feb.’99. In the present case, the Commissioner (Appeals) following the decision of the Hon’ble Supreme Court in the case of M/s. Jindal Poly Films Ltd. [2006 (4) TMI 129 - SUPREME COURT OF INDIA] rightly allowed the credit for the period 01.03.1997 to 03.05.1997 and upheld the demand for the period 23.07.1996 to 28.02.1997 - Decided partly against assessee. Issues:1. Interpretation of Notification No.5/94-CE (NT) and subsequent amendments regarding Cenvat credit on inputs, including Furnace Oil.2. Validity of Notification No.14/97-CE (NT) and Section 87 of the Finance Act, 1997 in restricting credit on specified petroleum products.3. Applicability of Rule 57A and Rule 57B of the Central Excise Rules, 1944 in availing Cenvat credit.4. Impact of the decision in the case of Jindal Poly Films Ltd. on the present case.5. Dispute over the demand of duty for the period 23.07.1996 to 28.02.1997.Analysis:1. The case involved a dispute regarding the availing of Cenvat credit by the assessees on inputs, including Furnace Oil, used in the manufacture of Glass Bottles. The issue arose due to amendments in Notification No.5/94-CE (NT) and subsequent restrictions imposed by Notification No.14/97-CE (NT) and Section 87 of the Finance Act, 1997. The Tribunal examined the applicability of these notifications and the legality of the demand of excess credit availed by the assessees.2. The Tribunal considered the validity of Notification No.14/97-CE (NT) and Section 87 of the Finance Act, 1997, which restricted the credit of duties paid on specified petroleum products. The retrospective amendment by Section 87 impacted the period from 23.07.1996 to 03.05.1997. The dispute revolved around the interpretation and application of these legal provisions in relation to the demand raised by the adjudicating authority.3. The Tribunal analyzed the relevance of Rule 57A and Rule 57B of the Central Excise Rules, 1944 in the context of availing Cenvat credit. The assessees claimed that they availed credit under Rule 57D, while the Revenue argued for the application of Rule 57A and Rule 57B. The interpretation of these rules played a crucial role in determining the eligibility of the assessees for the credit on inputs.4. The Tribunal referred to the decision in the case of Jindal Poly Films Ltd. to assess its impact on the present case. The decision by the Hon'ble Supreme Court provided guidance on the entitlement of credit under the Modvat scheme for specific inputs like Furnace Oil. The Tribunal considered the applicability of this decision in the context of the dispute at hand and its implications on the demands raised by the Revenue.5. Lastly, the Tribunal addressed the specific issue of the demand of duty for the period 23.07.1996 to 28.02.1997. The arguments presented by both parties regarding this period were scrutinized in light of the legal provisions, notifications, and relevant judicial precedents. The Tribunal concluded the case based on the interpretation of the law and the precedents cited, ultimately dismissing both appeals filed by the appellant and the Revenue.