2015 (3) TMI 386 - AT - Central Excise

Appeal Allowed: Cenvat Credit Denial on Tarpaulin Overturned

SRF Ltd. Versus Commissioner of Central Excise, Trichy

SRF Ltd. Versus Commissioner of Central Excise, Trichy - TMI Issues:Denial of cenvat credit on Tarpaulin under different chapter headings during a specific period.Analysis:The appellant appealed against the denial of cenvat credit amounting to Rs. 12,24,357/- related to five show cause notices issued between 16.4.1993 to 20.7.1994. The appellant was involved in manufacturing 'Double side PVC coated Nylon Fabrics' and fabricated covers known as 'Tarpaulin.' The denial of credit was based on the classification of Tarpaulin under different chapter headings. Initially cleared under Chapter Heading 3926.90, it was later classified under Heading 6301. The show cause notices proposed to deny cenvat credit and levy appropriate duty under Chapter 6301. The impugned order indicated discrepancies in duty payments for Tarpaulin under different chapter headings.During the material period, the appellant paid duty on Tarpaulin under Chapter Heading 39 amounting to Rs. 66,58,896/-. However, the demand of duty under Chapter 63 was Rs. 32,56,316/-. The adjudicating authority highlighted the lack of clarity regarding the duty leviable on double side coated fabrics consumed in the final product. The appellant argued that they had already paid excess duty of Rs. 66,58,896/-, exceeding the total demand of Rs. 32,56,316/-. The absence of any demand raised on the fabrics consumed in the final product supported the appellant's claim. Consequently, the denial of cenvat credit of Rs. 12,24,357/- was deemed unjustifiable.In light of the discussion, the impugned order was set aside, and the appeal was allowed with consequential relief. The appellant was not entitled to a refund of the differential duty amount as they had not filed any claim for the same. The judgment was dictated and pronounced in open court by the presiding judges.