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of <h1>Challenged Cenvat credit disallowance leads to favorable appeal outcome</h1> The case involved the disallowance of Cenvat credit and imposition of a penalty under Central Excise Rules. The appellant contested the disallowance, ... CENVAT Credit - duty paying documents - Revenue was of the view that availment of Cenvat credit on the basis of order-in-original was not proper as per Rules 3 & 9 of the Cenvat Credit Rules - HELD THAT:- In the present case the appellant has not paid any excise duty for which they are required to make claim for refund of duty. It is the case where certain credit taken by them was sought to be denied and during the course of the proceedings for denial of such Cenvat Credit, the appellant reversed the entire credit sought to be disallowed to them. Subsequently major portion of such credit has been allowed to them. If Revenue had any objection to the order-in-original they should have preferred an appeal before the appropriate authority. By way of issuing second show cause notice they could not have denied the benefit granted to the appellant in the first round of proceedings. Appeal allowed. Issues:1. Disallowance of Cenvat credit and payment order.2. Imposition of penalty under Central Excise Rules.3. Availment of Cenvat credit based on order-in-original.4. Adjudication of show cause notice.5. Appeal against the order-in-original.6. Tribunal's remand order and subsequent proceedings.7. Grounds for confirmation of demand.8. Issue of prescribed document for credit availment.9. Comparison with relevant case law.10. Final decision and consequential reliefs.Analysis:1. The case involved the disallowance of Cenvat credit of Rs.10,09,364 along with interest and imposition of a penalty of Rs.5000 under Rule 27 of the Central Excise Rules based on the order-in-original dated 31.07.2008 by the Additional Commissioner, upheld by the Commissioner (Appeals).2. The appellant contested the disallowance of credit based on the order-in-original, leading to the imposition of the penalty under Rule 27 of the Central Excise Rules, 2002.3. The issue centered around the availing of Cenvat credit based on the order-in-original, which the Revenue deemed improper as per Rules 3 & 9 of the Cenvat Credit Rules, leading to a show cause notice and subsequent adjudication by the Additional Commissioner.4. The show cause notice raised demands related to the Cenvat credit amount, interest, and penalty, which were adjudicated by the Additional Commissioner, and the appeal against this order was dismissed by the Commissioner (Appeals), prompting the appellant to file the current appeal.5. The appellant's appeal highlighted previous proceedings where the Tribunal remanded the matter to the original authority for fresh decision, resulting in the allowance of a major portion of the credit in favor of the appellant.6. The Tribunal's remand order led to the appellant taking Cenvat Credit, which was earlier reversed by them, based on the subsequent order-in-original, triggering objections from the Revenue and subsequent confirmation of the demand by the Additional Commissioner and Commissioner (Appeals).7. The confirmation of demand was primarily based on the argument that the credit availed on the basis of the order-in-original was not proper due to the document not being prescribed for credit availment.8. The judgment compared the present case with relevant case laws like Ultra Tech Cement Ltd., Vardhaman Acrylics Ltd., Tantech Agro Chemicals Ltd., and Sharda Forging and Stampings P. Ltd. to establish the validity of the appellant's claim for credit availment.9. The judgment distinguished the present case from BDH Industries Ltd., emphasizing that the appellant's actions did not involve a refund claim but rather a denial of credit, leading to the allowance of a major portion of the credit in subsequent proceedings.10. Ultimately, the appeal was allowed with consequential reliefs, highlighting that the Revenue could not deny the benefit granted to the appellant in the first round of proceedings through a second show cause notice, as per legal provisions and precedents.(Order pronounced in the open court)
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