TaxTMI 
TaxTMI 
2014 (2) TMI 1321
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....rs are removed by passing through magnetic field. The cleaned seeds are cooked with steam and then crushed to form thin flakes. These flakes are again passed through the extruder/expander to make the flakes into collets. The collets are then conveyed to extractor and solvent hexane is sprayed on it in counter current direction. As hexane comes into contact with meal, the oil get dissolved and separated out with solvent. The de-oiled meal containing about 30% solvent is sent to drying and toasting in desolventiser-cum-toaster. Dried and toastered meal is called de-oiled cake (DOC) which is ready for bagging and dispatch. The solvent containing oil is called micelle which is treated at various steps to recover solvent. Solvent free oil is called solvent extraction oil or crude oil. It is non-edible and sent to refinery for refining. Further refining of vegetable oil consists of number of steps called degumming, neutralisation, bleaching deodorization, etc. During the processes of degumming crude vegetable oil is treated with phosphoric acid at 60-degree centigrade and then fed to Centrifuge machine to separate out the gummy matters. To neutralise the degummed oil it is then treated w....
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.... and other taxes, if any, paid on such goods from their Cenvat credit at the time of their clearance. It was the claim of the AA that during the period from 30-4-2003 to 9-9-2004, the assessee had cleared 78,698.990 MT of D.O.C. valued at Rs. 76,14,20,334/- and 1.000 MT of Gum valued at Rs. 3,269/- generated during the refining of crude vegetable oil without reversing an amount equal to eight per cent. of the price at the time of their clearance from the factory. The claim of the AA was also that subsequently also, this happened under different periods and accordingly, was of the view that the respondent-assessee had contravened the provisions of Rules 4, 6, 8, 10 and 12 of the Central Excise Rules, 2002 and Rule 6 of the erstwhile Cenvat Credit Rules, 2002 and Rule 6 of the Cenvat Credit Rules, 2004. Accordingly, a show cause notice was issued and it was observed in the show cause notice that an amount of Rs. 8,84,29,478/- was recoverable from the assessee in terms of Rule 12 of the erstwhile Cenvat Credit Rules, 2002 and Rule 14 of the Cenvat Credit Rules, 2004 read with Sec. 11A of the Central Excise Act, 1944 and so also the interest. It was observed that the assessee had suppr....
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....ules, 2002. Interest was also directed to be levied accordingly. 6. Aggrieved by the order of the AA, an appeal came to be preferred by the respondent-assessee before CESTAT. What was submitted before the AA was reiterated before the CESTAT and it was further submitted that the respondent-assessee had been filing monthly returns regularly showing clearance of goods on payment of duty as well as exempted goods and, therefore, the allegation of suppression with an intent to evade payment of duty is not sustainable it was contended that Revenue vide letter dated 26-6-2003, for the first time asked the respondent-assessee to pay Central Excise Duty at the rate of 8% of the price of the exempted goods as per Rule 6 of the Cenvat Credit Rules and by that time the Revenue was aware that the respondent-assessee was clearing goods manufactured of common inputs without payment of duty and therefore, was not justified and it was further submitted that they are ready to reverse whole of the credit availed on common inputs and accordingly submitted that the claim of the respondent-assessee is proper and the appeal deserves to be allowed. 7. The Revenue reiterated what had been d....
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.... have offered for reversing the inputs credit after so many years and he contended that it is only when the respondent-assessee was faced with this situation that he came out with this plea and had the respondent-assessee not been questioned, possibly, the claim, which was otherwise not allowable, would have gone unnoticed and therefore, observation of the CESTAT to reverse the entire credit is not justified. He contended that substantial question of law arises out of the order of the CESTAT and needs consideration by this Court. 10. Per contra, Mr. Ankit Totuka, ld. counsel for the respondent-assessee, reiterated the arguments and further contended that all along the respondent-assessee had been furnishing regularly the monthly returns and had been giving in detail the modus operandi of the inputs created and that there was no suppression with intention to evade payment of duty when everything was crystal clear in the regular returns being filed. He also contended as far as the subsequent period is concerned, the claim was certainly allowable in view of the circular of the Central Excise dated 30-4-1975. Nevertheless, despite of the Circular, the respondent-assessee offere....
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....sion of the Revenue. 14. In so far as the subsequent period is concerned, in our view, the CESTAT, after accepting the contention of the respondent-assessee, accepted the offer of the respondent-assessee that they would reverse the entire credit on the common inputs. The Gujarat High Court, in the case of Commissioner of Central Excise v. Maize Products - 2009 (234) E.L.T. 431 (Guj.), held that the direction issued by the Tribunal are merely in consonance with the requirement of the relevant rules and it is not possible to state that the Tribunal has committed any error in issuing such directions. The assessee, having accepted before the Tribunal to reverse the Cenvat credit as recorded by the Tribunal as regards reversal of the amount involved under such a situation, the High Court held that when the matter has been remanded back to the Adjudicating Authority to redetermine the credit in accordance with law there was no substantial question of law and accordingly dismissed the appeal of the Revenue. 15. The Gujarat High Court, in the case of Commissioner of C. Ex. & Customs, Vadodara-I v. Sterling Gelatin - 2011 (270) E.L.T. 200 (Guj.), held that under the scheme o....