Shree Krishna Paper Mills & Industries Limited Vs Commissioner of Central Excise And Service Tax (CESTAT Chandigarh)
CESTAT Chandigarh held that once Cenvat Credit is availed the same cannot be disallowed later as it was held that processing of uncoated paper didn’t amount to manufacture. Accordingly, appeal is allowed.
Facts- The appellants, M/s Shree Krishna Paper Mills and Industries Ltd., Bahadurgarh, are engaged in the processing of coating of uncoated paper falling under Chapter Heading 4810. Based on CESTAT decision in the case of Pitambar Coated Paper Ltd., the appellants concluded that the process of coating does not amount to manufacture and as such, they are not required to pay any duty and that they would be clearing their final goods without payment of duty. Thus, the appellants on the advice of the Department, reversed credit of Rs.57,26,743/-.
Revenue issued periodical Show Cause Notices to the appellants demanding the duty not paid on certain clearances. Subsequently, all the fourteen Show Cause Notices were adjudicated vide the impugned order dated 29.01.2016.
The appellant, submits that the demands have been raised demanding duty on account of short payment of duty, which has been paid by utilizing CENVAT credit, of input used in the finished goods cleared without payment of duty, which would have been paid through PLA; as the Hon’ble Apex Court has decided the issue holding that processing of uncoated paper did not amount to manufacture, no duty is payable by the appellants and it is immaterial and irrelevant whether such duty was paid through cash or CENVAT credit. He submits that there was no dispute with regard to availment of CENVAT credit; once the said credit was admissible, the appellant rightly utilized the same for the payment of duty on the final product cleared by them; utilization of credit cannot be disallowed when the availment of credit itself was not disputed.
