2015 (5) TMI 699 - AT - Central Excise

Tribunal Rules in Favor of Appellant Company on Cenvat Credit Disputes

M/s Balkrishna Industries Ltd., Shri Pawan Batra Versus Commissioner of Central Excise And Service Tax, Jaipur

M/s Balkrishna Industries Ltd., Shri Pawan Batra Versus Commissioner of Central Excise And Service Tax, Jaipur - TMI Issues:1. Cenvat credit demand against Chopanki Unit for job work.2. Denial of cenvat credit to Bhiwadi Unit under Rule 9(1)(b) of Cenvat Credit Rules.3. Cenvat credit demand against Bhiwadi Unit for use of synthetic rubber.4. Orders passed by the Commissioner Central Excise, Jaipur.Analysis:Issue 1: Cenvat credit demand against Chopanki Unit for job workThe appellant company had two units for tyre manufacturing, with one unit lacking the facility for preparing compounded rubber. Inputs were sent from one unit to another for job work, and invoices were raised accordingly. The demand of cenvat credit against the Chopanki Unit was contested, citing previous Tribunal judgments that no reversal of credit is required when inputs are used for job work without physical removal. The Tribunal agreed, waiving the pre-deposit requirement for the appeal and staying recovery.Issue 2: Denial of cenvat credit to Bhiwadi Unit under Rule 9(1)(b)The Bhiwadi Unit faced denial of cenvat credit under Rule 9(1)(b) for alleged deliberate non-reversal by the Chopanki Unit. The appellant argued against this, referencing a Karnataka High Court judgment that Rule 9(1)(b) does not apply in cases of stock transfer without sale. The Tribunal found in favor of the appellant, waiving the pre-deposit requirement and staying recovery for the appeal.Issue 3: Cenvat credit demand against Bhiwadi Unit for use of synthetic rubberA cenvat credit demand was made against the Bhiwadi Unit for the use of synthetic rubber in job work, where duty-free rubber was also utilized. The appellant contended that no duty was required to be paid for such usage under Rule 3(5). Citing a Supreme Court judgment, the Tribunal agreed with the appellant's interpretation, waiving the pre-deposit requirement and staying recovery for the appeal.Issue 4: Orders passed by the Commissioner Central Excise, JaipurThe Commissioner passed orders confirming cenvat credit demands and imposing penalties on the units. However, the Tribunal, after considering submissions from both sides and perusing the records, found in favor of the appellants on various grounds, including the applicability of previous judgments and legal interpretations. The Tribunal waived pre-deposit requirements and stayed recovery for the appeals filed by the appellant company and its units.This detailed analysis summarizes the legal judgment comprehensively, addressing each issue involved in the case while preserving the legal terminology and significant details from the original text.