2016 (1) TMI 105 - AT - Central Excise

Tribunal grants CENVAT credit in job work case, criticizes lack of legal precedent application

The Tribunal set aside the Commissioner(Appeals) order and allowed the appeal, providing consequential relief to the appellant regarding entitlement to ... Cenvat Credit - Input used by the Job worker - Exemption in terms of Notification No.214/86-CE dt. 26/03/1986 - Held that:- The appellate authority has also observed in his impugned order that the issue stands decided. However he has not extended the benefit to the assessee on the sole ground that the period involved in those cases was prior to the period involved in the present case. However he has not referred to any change either in law or in the wordings of the Notification No.214/86-CE so as not to apply the ratio of the said decision. Merely by observing that the appellant has availed credit in respect of furnace oil and Oxygen which has been used by them in the manufacture of the goods cleared without payment of duty in terms of Notification No.214/86-CE, he has set aside the impugned order of the lower authorities. Such an act on the part of the Commissioner(Appeals) reflects upon the predetermined mind and lowers the public faith in the fair outcome of litigation. - Credit allowed - Decided in favor of assessee. Issues: Entitlement to CENVAT credit on duty paid inputs used in job work manufacturing under Notification No.214/86-CE.Analysis:1. The appellants, manufacturers of non-alloy steel bars, were also undertaking job work for customers under Notification No.214/86-CE. They used duty paid furnace oil and Oxygen during manufacturing and availed CENVAT credit on the inputs.2. Revenue contended that since goods were cleared without duty payment under the notification, the appellants were not entitled to CENVAT credit. A show-cause notice was issued proposing to deny credit of &8377;54,085/- availed during July 2010 to October 2010.3. The original adjudicating authority considered the Tribunal's decision in Sterlite Industries Ltd. and Punjab & Haryana High Court's decision in Jainsons Wool Coombers Ltd., and dropped the proceedings.4. Revenue appealed to the Commissioner(Appeals), who reversed the order, leading to the present appeal.5. In the absence of the appellant, the learned Superintendent argued for the Revenue.6. The Tribunal noted that the issue was decided in favor of the assessee in previous cases, but the Commissioner(Appeals) did not extend the benefit based on a difference in the period involved, without any change in law or the notification's wording. This was deemed unjustified.7. The Tribunal criticized the Commissioner(Appeals) for not applying the established legal precedents due to a mere difference in the period involved, which undermined public trust in fair litigation outcomes. The decision was seen as reflecting a predetermined mindset.8. Consequently, the Tribunal set aside the Commissioner(Appeals) order and allowed the appeal, providing consequential relief to the appellant.