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Tribunal Upholds Appeal, Rejects Duty Demand on Rectified Spirit, Credits Reversed The Tribunal upheld the Commissioner (Appeals) order, rejecting the appeal against the demand of duty at 8% on rectified spirit cleared at nil rate of ...
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The Tribunal upheld the Commissioner (Appeals) order, rejecting the appeal against the demand of duty at 8% on rectified spirit cleared at nil rate of duty. The reversal of credit on Molasses, considered as an input for manufacturing rectified spirit, rendered the demand unsustainable. The Tribunal found the reversal of credit on inputs for exempted rectified spirit production to be correct, making the demand for 8% duty improper. The order was pronounced on 2-12-2005.
Issues involved: Appeal against demand of duty at 8% on rectified spirit cleared at nil rate of duty, reversal of credit on Molasses, applicability of Rule 57CC.
Summary: The appeal was filed against the demand of duty at 8% on rectified spirit cleared at nil rate of duty. The Deputy Commissioner confirmed the demand based on the value of rectified spirit. However, the Commissioner (Appeal) noted that the assessee had reversed credit on Molasses, which was considered as an input for manufacturing rectified spirit, making the demands unsustainable. The Tribunal heard arguments from both sides.
The learned DR reiterated the grounds of the appeal, while the Counsel submitted that the demand confirmation was unnecessary as they had already reversed the credit. It was stated that duty on molasses, amounting to Rs. 46,19,293/-, had been paid and not disputed by the Department. The respondent had also reversed the credit on inputs used for manufacturing exempted rectified spirit, without using any other raw materials for such goods. The Counsel argued that the provision of Rule 57CC, referred to by the Commissioner (Appeals), was not relevant as the credit on molasses had been reversed entirely.
After careful consideration, the Tribunal found the assessee's submissions to be correct. The reversal of credit on inputs for exempted rectified spirit production made the demand for 8% duty improper. The Tribunal upheld the Commissioner (Appeals) order as legal and correct, rejecting the appeal.
The operative portion of the order was pronounced in open court on 2-12-2005.
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