2023 (12) TMI 370 - AT - Central Excise

Tribunal Overturns Commissioner's Decision: No Additional Payment for Utilized Cenvat Credit Required.

The Tribunal upheld the original authority's decision, allowing the appellant's appeal and setting aside the decision of the Commissioner (Appeals). The ... Exemption under N/N. 08/2003-CE dated 01.03.2003 availed - requirement of discontinuation of availment of cenvat credit - invocation of sub-rule (2) of Rule 11 of Cenvat Credit Rules, 2004 - HELD THAT:- In the final order of this Tribunal in the case of COMMISSIONER OF C. EX., CHANDIGARH VERSUS CNC COMMERCIAL LTD. [2006 (2) TMI 576 - CESTAT, NEW DELHI] it was observed that the said rule contemplated that additional payment was not allowed to be demanded by invoking the said rule. The original authority has dropped the demand by relying on the final order of this Tribunal in the case of CNC Commercial Ltd. The said final order was ultimately affirmed by Hon’ble Supreme Court. The order passed by the original authority through which proceedings initiated through show cause notice dated 09.06.2009 were withdrawn, is upheld - the impugned order set aside - appeal allowed. Issues involved:The issues involved in the judgment are the availing of cenvat credit, discontinuation of cenvat credit, demand of cenvat credit, interpretation of Rule 11 of Cenvat Credit Rules, 2004, and the authority to reverse the balance of cenvat credit.Comprehensive details of the judgment:Availing of cenvat credit and discontinuation:The appellant was availing the benefit of cenvat credit and paying central excise duty during the financial year 2007-08. However, with effect from 01.04.2008, the appellant decided to avail full exemption from payment of central excise duty, which required discontinuation of availing cenvat credit.Demand of cenvat credit and interpretation of Rule 11:A show cause notice was issued to the appellant, raising a demand of cenvat credit of Rs.6,11,676 based on the inputs involved in the goods manufactured. The original authority referred to the case law Commissioner of Central Excise, Chandigarh vs. CNC Commercial Ltd., which observed that additional payment cannot be demanded by invoking Rule 11 of Cenvat Credit Rules, 2004. The original authority held that there was no provision to demand the amount under Rule 14 of the rules and dropped the proceedings.Appeal and arguments:The Revenue appealed against the original authority's decision, which was set aside by the learned Commissioner (Appeals). The appellant argued that the provisions of Rule 11 of Cenvat Credit Rules, 2004 do not allow for the recall of credit already utilized correctly and that no cash payment is required when the balance in the cenvat credit is insufficient.Judgment and conclusion:The Tribunal upheld the original authority's decision, citing the final order in the case of CNC Commercial Ltd., which was affirmed by the Hon'ble Supreme Court. The Tribunal withdrew the proceedings initiated through the show cause notice and set aside the decision of the learned Commissioner (Appeals).In conclusion, the appeal was allowed, and the order was pronounced in the open court on 07.12.2023.