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2024 (3) TMI 913
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....wn appeal and that of Revenue respectively stand substituted. The dispute, relating to the period from March 2008 to May 2010 has its origins in a series of developments in procedure stipulated for exports as well as the exemption accorded to some of the goods manufactured by them which have had its impact on recourse to CENVAT Credit Rules, 2004. 2. Among other goods, M/s Jindal Drugs Pvt Ltd manufactured 'menthol crystal', and primarily for export, at their Taloja plant (then an undertaking of M/s Tien Yuan (I) Pvt Ltd) using 'mentha oil' procured from M/s Jindal Drugs Private Ltd at Jammu and was taking credit thereto under rule 12 of CENVAT Credit Rules, 2004 even though the supplier was availing 'area based exemption' in terms of no....
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....e, in the other process, no product other than 'menthol crystal' emerges. He contended that the production of such other goods which are not exempted suffices for inclusion of 'mentha oil' in 'inputs' and, hence, entitled for availing duty thereon as credit. He drew attention to the acknowledgement of the fitment of their manufacturing process within that factual matrix as also the entitlement to neutralization of duties inhering in the goods exported. Reliance was placed on the decision of the Hon'ble High Court of Bombay in Union of India v. Sharp Menthol India Ltd [2011 (270) ELT 212 (Bom)] and in Repro India Ltd v. Union of India [2009 (235) ELT 614 (Bom)], of the Hon'ble High Court of Himachal Pradesh in Commissioner of Central Excise ....
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....vailed from March 2008 on 'inputs', including Rs. 29,11,72,734 on 'mentha oil', procured by them, and packing materials attributable to process that did not yield any other products which was proposed in notice dated 2nd April 2009. Thereafter, four notices dated 22nd December 2009, 29th September 2010, 17th January 2011 and 5th April 2011 were issued for recovery of Rs. 9,85,96,256, Rs. 5,29,07,035, Rs. 4,64,16,404 and Rs. 50,08,438, totaling Rs. 30,15,24,389, availed as credit for the period from January 2009 to September 2009, October 2009 to December 2009, January 2010 to May 2010 and March 2010 to May 2010. Further, founded on resort to rule 11 of CENVAT Credit Rules, 2004, credit of Rs. 8,21,95,386 pertaining to 'inputs' used in finis....
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....ligation in rule 6(3) of CENVAT Credit Rules, 2004, was recoverable and, by reference to proportion as before, was crystallized at Rs. 20,86,496. As far as the stock lying with assessee on the two days on which exemptions came into force was concerned, Rs. 4757 and Rs. 1,72,098 were held as recoverable by application of proportion as before to credit of Rs. 1,65,169 pertaining to packaging material and to credit of Rs.13,27,920. 7. From the above, the facts that emerge are that 'menthol crystal' was exempted from duties of central excise with effect from 1st March 2008 though other products emerging from the process continued to be dutiable till February 2010. The manufacturing process for 'menthol crystal' and others were stated to be o....
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....rned Authorized Representative that the cited Explanation has retrospective effect. We, therefore, examine the entitlement in terms of operation under the CENVAT credit scheme. As we have premised, this is a dispute about eligibility for retention of credit availed validly under rule 3 of CENVAT Credit Rules, 2004. It is only upon deployment of such goods in the production of 'exempted goods', which 'menthol crystal' was since 1st March 2008, that rule 6(1) of CENVAT Credit Rules, 2004 is brought to bear. Likewise, it is only upon deployment of such goods in the production of 'exempted goods', which other products were was since 1st March 2010, that rule 6(1) of CENVAT Credit Rules, 2004 is brought to bear. The operation of the said exclusi....