Tribunal overturns Commissioner's order on duty reversal for DG sets, citing evidence and rules

The tribunal allowed the appeal in favor of the appellant, setting aside the Commissioner's order requiring the reversal of credit/discharge duty on the clearance of DG sets procured in 2001 without payment of duty in 2014. The tribunal found that no cenvat credit was availed on the capital goods at the time of procurement, based on evidence provided by the appellant, including a Chartered Engineer's certificate and statutory audit report. Consequently, the tribunal held that certain Cenvat Credit Rules were not applicable, leading to a successful outcome for the appellant.

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Issues:
1. Duty payment on clearance of DG sets procured in 2001 without payment of duty in 2014.
2. Availment of cenvat credit on capital goods procurement.
3. Reversal of credit/discharge duty on clearance of DG sets.

Analysis:
The case involved an appeal against an order passed by the Commissioner (Appeals I), Central Excise, Vadodara II, related to the clearance of 825 DG sets in 2014 without payment of duty, which were procured in 2001. The appellant was asked to reverse the credit/discharge duty amounting to Rs. 1,08,990. The appeal was rejected by the Commissioner (Appeals), leading to the present appeal before the tribunal.

The appellant argued that no cenvat credit was availed on the capital goods procured in 2001. Supporting this claim, they provided a Chartered Engineer's certificate and the statutory audit report for the Income Tax Assessment Year 2002-2003. They contended that depreciation was claimed on the capital goods without claiming cenvat credit at the time of procurement.

The Revenue, represented by the Advocate, reiterated the findings of the Commissioner (Appeals). However, the tribunal, after considering the evidence presented by the appellant, noted that there was no availing of cenvat credit on the DG sets at the time of procurement. As a result, the tribunal held that the provisions of Rules 3(5A) and 8(b) of the Cenvat Credit Rules, 2004 were not applicable in this case. Consequently, the tribunal set aside the impugned order and allowed the appeal in favor of the appellant.

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