Case Law Details
EID Parry (India) Ltd. Vs Commissioner of GST & Central Excise (CESTAT Chennai)
CESTAT Chennai held that input credit of duty paid on molasses used in production of rectified spirit being a final product is eligible as CENVAT Credit.
Facts- The appellant is engaged in the manufacture of Denatured Ethyl Alcohol falling under Chapter Heading 2207 20 00 of the Central Excise Tariff Act, 1985 and Rectified Spirit, Extra Natural Alcohol, Anhydrous Alcohol, Impure Spirit, etc. using molasses procured from their sister units in Pudukottai, Nellikuppam and Pugalur. The appellant availed cenvat credit of the duty paid on molasses procured from the sister units.
During scrutiny of the records and returns filed by the appellant it was noticed that the appellant had paid appropriate duty on the Denatured Ethyl Alcohol falling under Chapter Heading 2207 20 00. However, the Rectified Spirit which is cleared by them being not dutiable, they had paid an amount equal to 6% of the value of Rectified Spirit under Rule 6 (3) (i) of Cenvat Credit Rules, 2004. With effect from 01.03.2005, the Rectified Spirit was omitted from Heading 2207 of the Schedule to the CETA, 1985. It therefore appeared to the department that Rectified Spirit is not excisable goods and does not fall under the term ‘final product’. The availment of input credit of the duty paid on molasses used in the production of Rectified Spirit (not being a final product) appeared to be therefore incorrect.
Consequently, the show cause notice dated 19.07.2013 was issued proposing to deny the credit availed on molasses used in the manufacture of Rectified Spirit and also to recover the same along with interest and for imposing penalties. After due process of law, the original authority confirmed the demand along with interest and imposed penalty. Aggrieved by the said order, appellant is now before the Tribunal.
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