2013 (11) TMI 1414

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....ther than PU foam manufactured by the appellant were totally exempt. In the budget of 2011, 1% duty was imposed in terms of Notification No. 1/2011-CE on both the final products other than PU foam manufactured by the appellants. The Notification prescribed 1% duty if no CENVAT credit is availed on inputs and 5% if CENVAT credit is availed. The appellants started paying 1% duty on the products other than PU foam and continued to avail CENVAT credit of duty paid on the inputs used in the manufacture of PU foam which was cleared for captive consumption in the manufacture of rubberized foam mattresses and rubberized coir mattresses. During the audit of the appellants factory in October 2011, it was pointed out to the appellants that according ....

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....s which are exempt in terms of Notification No. 1/2011 since the duty at 1% was paid by the appellant was clearly not correct. The question that arises in this case is whether the appellant's action of paying duty on the PU foam cleared within the factory would be sufficient in terms of Notification No. 1/2011 to make them eligible for 1% duty and in terms of Notification No 67/95 is the question. 2. The learned counsel submits that the Commissioner has held that the inputs used in the manufacture of PU foam have to be considered as inputs and therefore the payment of duty made by them on the captively consumed PU foam is not at all relatable for the purpose of determining the admissibility of concessional rate on the finished products. ....

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....unal in the case of Tata Chemicals Ltd. Vs Commissioner of Central Excise Rajkot [2008(232) E.L.T. 737 (Tri-Ahmd)] and M/s Shivalik Agro Poly Products Ltd. Vs. Commissioner of Central Excise, Chandigarh [1999 (114)E.L.T. 760 (Tribunal)] are on the same issue and support the case of the appellant. The decision in the case of Shivalik Agro Poly Products Ltd. was upheld by the Honble Supreme Court in 2005(184)E.L.T. 124(S.C.)]. In the case of Tata Chemicals Ltd,, in para-7, this Tribunal observed as follows:-            7.The next issue to be considered is the demand for Rs. 2,77,15,038/- for the periods from 2001-02 to 2005-06. The appellants have contested the demand on the ground of limi....

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....uty paid. Therefore, we feel that extended period has been rightly invoked. Further the fact that appellants on their own paid the duty on soda ash used for producing exempted goods on 5-9-2006 voluntarily also supports view. They have also claimed that they have reversed the credit also even though duty is paid on soda ash used for manufacture of exempted products, credit need not be reversed. However, the Commissioner has observed that this payment has been made without authority and without proper calculation. Therefore, the case will have to be remanded to the original Adjudicating Authority, who can get the correctness of the duty paid on the soda ash for the 5 year period by the appellants verified. Needless to say once duty is paid o....