2019 (2) TMI 936 - AT - Central Excise

Tribunal overturns order, emphasizes binding nature of decisions on lower authorities.

The Tribunal set aside the impugned order and allowed the appeal filed by the Appellant. The Commissioner's failure to follow the Tribunal's decision was ... SSI Exemption - Reversal of CENVAT Credit - amount equivalent to the Cenvat Credit contained in respect of inputs received for use in the manufacture of final product, which are lying in stock as on 1.4.20007 - proviso of Rule 11(2) & 11(3) of the Cenvat Credit Rules, 2004 - option exercised for exemption of Excise duty, under N/N. 8/2003-CE dated 1.3.2003. Held that:- Reliance placed in the appellant own case for the earlier period COMMISSIONER OF CENTRAL EXCISE, NASHIK VERSUS M/S TIRUPATI PIPES & ALLIED INDS. PVT. LTD. [2009 (12) TMI 1020 - CESTAT MUMBAI], where it was held that while opting for SSI exemption the assessee is not required to reverse the CENVAT Credit. Appeal allowed - decided in favor of appellant. Issues:Whether the Appellant is required to reverse/pay back the amount equivalent to the Cenvat Credit contained in respect of inputs received for use in the manufacture of final product, which are lying in stock as on 1.4.2007, before exercising the option for exemption of Excise duty under notification No.8/2003-CE dated 1.3.2003Rs.Analysis:Issue 1: Requirement to reverse/pay back Cenvat Credit amountThe Appellant availed the benefit of Notification No.8/2003-CE dated 1.3.2003 by procuring duty paid raw materials and utilizing Cenvat credit facility under the Cenvat Credit Rules, 2004. They opted for full exemption from central excise duty for the ensuing financial year 2007-08 and informed the department about their decision to opt out of Cenvat facility. The department contended that the Appellant cleared excisable goods at nil rate of duty without fulfilling conditions under Rule 11(2) & (3) of the Cenvat Credit Rules, 2004. A show cause notice was issued demanding central excise duty, interest, and penalty. The Adjudicating authority initially dropped the proceedings based on previous Tribunal decisions and Supreme Court rulings. However, on appeal by the Revenue, the Commissioner partly allowed the appeal and reduced the demand.Issue 2: Judicial Discipline and ProprietyThe Appellant argued that the Commissioner did not follow the Tribunal's previous decision in the Appellant's favor for an earlier financial year due to an appeal filed by the department being withdrawn before the High Court. The Commissioner's failure to rely on Supreme Court and High Court decisions supporting the Appellant's case was highlighted. The Tribunal emphasized the importance of judicial propriety, stating that the Commissioner was bound to follow the Tribunal's decision unless reversed or suspended. The Tribunal criticized the Commissioner's reasoning for not following the previous decision and highlighted the Supreme Court's stance on Cenvat credit being indefeasible. The Tribunal referenced previous Tribunal and High Court decisions supporting the Appellant's position and emphasized that lower authorities are bound by Tribunal decisions unless referred to a Larger Bench.Conclusion:The Tribunal found that the earlier decision in the Appellant's own case was valid and in accordance with the law. The Commissioner's failure to follow the Tribunal's decision was deemed an error, leading to the setting aside of the impugned order and allowing the Appellant's appeal. The Tribunal emphasized the binding value of its decisions on lower authorities unless referred to a Larger Bench, highlighting the importance of adhering to judicial discipline and propriety.Final Decision:The impugned order was set aside, and the appeal filed by the Appellant was allowed.