2026 (2) TMI 328 - AT - Central Excise

Special rate fixation and Cenvat selfcredit entitlement - remand to implement tribunal rates and allow selfcredit under High Court order

Tribunal ordered remand to the adjudicating authority to implement prior tribunal directions for special rate fixation based on actual value addition, and ... Remand for implementation of tribunal order - entitlement to self-credit / Cenvat credit under High Court order - manufacture of Oral Preparations, Cosmetics, Hair Care & Skin Care Preparations, falling under Chapters 33 & 27 - special rate fixation based on actual value addition - finality of tribunal order in absence of stay - res judicata arising from High Court decision - HELD THAT:- Appellant submits that infact the appellant filed various application in view of the Notifications 17/2008 CE dated 27.03.2008 and Notification No. 31/2008 C.E. dated 10.06.2008 for special fixation of rates which were pending before this Tribunal and this Tribunal vide Final Order No. 76746 -76760/2023 dated 22.09.2023 allowed their appeals and directed the Adjudicated Authority to implement special rates as prayed by the appellant in their applications. In view of that it would be in the interest of justice to direct the Adjudicating Authority first to implement our order dated 22nd September, 2023 and thereafter to adjudicate the impugned Show Cause Notices issued to the appellant. In view of this, we set aside the impugned orders and remand matter back to the Adjudicating Authority to implement our order dated 22nd September, 2023 within 60 days from today and thereafter to adjudicate the impugned Show Cause Notices within one month thereof. With these terms appeal is disposed of by way of remand. Entitlement to take Cenvat Credit - HELD THAT:- We hold that in terms of the order of Hon’ble Guwahati High Court wherein the demand raised by denying self credit to the appellant was set aside by the Hon’ble Guwahati High Court. Therefore, the said issue is no more res-integra. Therefore, appellant is entitled to take self-credit in terms of the order of the Hon’ble High Court of Guwahati. Thus, the impugned orders are set aside and remanded to the Adjudicating Authority to pass the fresh order. Issues: Whether the appellant is entitled to take self-credit / Cenvat credit in respect of the periods and amounts in question in view of (i) the Tribunal's Final Order allowing fixation of special rates based on actual value addition and (ii) the Gauhati High Court orders setting aside demands, and whether the adjudicating authority should first implement the Tribunal's order before adjudicating the pending Show Cause Notices.Analysis: The Tribunal has allowed the appeals for fixation of special rates for the relevant financial years on the basis that actual value addition as claimed by the appellant was correct. The Gauhati High Court had earlier set aside demands raised by denying self-credit and those orders operate in favour of the appellant for the relevant periods. The adjudicating authority issued demand orders notwithstanding the Tribunal's favourable Final Order and the absence of any stay on that Final Order. In these circumstances, it is appropriate to require the adjudicating authority to implement the Tribunal's order on fixation of special rates within a specified time and thereafter revisit and adjudicate the Show Cause Notices in light of the implemented rates and the High Court position on self-credit.Conclusion: The appellant is entitled to take self-credit / Cenvat credit in terms of the Gauhati High Court orders and the matter is remitted to the adjudicating authority to implement the Tribunal's Final Order dated 22.09.2023 within 60 days and thereafter to adjudicate the impugned Show Cause Notices within one month; the impugned orders are set aside and the appeals are disposed of by way of remand in favour of the appellant.