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Case Law Details

Case Name : Gujarat Sulphur Limited Vs C.C.E. & S.T (CESTAT Ahmedabad)
Appeal Number : Excise Appeal No. 10340 of 2013
Date of Judgement/Order : 23/01/2023
Related Assessment Year :
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Gujarat Sulphur Limited Vs C.C.E. & S.T (CESTAT Ahmedabad)

Appellant submits that the appellant under bonafide belief that the sulphur powder manufactured by them attracts duty under sub-heading no CETH 2503 010 hence availed the cenvat credit and paid the excise duty on the finished goods. Once the excise duty was paid on the finished goods, cenvat credit on the inputs cannot be denied even if it is found that the finished goods cleared by appellant is not otherwise dutiable submits that the duty paid on the finished goods is much more than the Cenvat Credit availed on the inputs, therefore, there is Revenue neutral situation and no demand will survive. In this regard he placed reliance on the Hon’ble Supreme Court judgement in the case of CCE vs Jamshedpur vs Jamshedpur Beverages 2007 (214) ELT 321 (SC). He further submits that once the duty is paid on the finished goods even though said finished goods attract nil rate of duty or exempted under any notification, the cenvat credit on the input cannot be denied. He alternatively submits that even in terms of Rule 16 of Central Excise Rules, 2002, it permits to an assessee to receive duty paid goods in the factory, avail cenvat credit thereon and while clearing to pay the duty either any process is involved or without any process, therefore, this transaction is otherwise covered under Rule 16 of Rules.

Rule 16 of Central Excise Rules, 2002 clearly provides that an assessee can receive the duty paid goods in their factory and avail the cenvat credit and while clearing the same out of the factory, the same can be cleared on payment of excise duty. In this provision, the duty paid goods is deemed to be input in terms of Cenvat Credit Rules. The said goods can be cleared on payment of duty and the credit availed on the goods received by the assessee is allowed. In the present case also, the appellant have received the duty paid inputs, thereafter processed the same and cleared after processing on payment of duty on the transaction value. This would as permitted in terms of Rule 16 of Central Excise Rules 2000, therefore, the transaction in the present case is squarely covered by the Rule 16 of Rules. For this reason also, the cenvat credit on the input received by the appellant for manufacture of Sulpur Powder cannot be denied.

FULL TEXT OF THE CESTAT AHMADABAD ORDER

This appeal is directed against order in appeal passed by learned Commissioner (Appeals), whereby the order of the Original authority was set aside and Revenue’s appeal was allowed. The case of the department is that since the appellant have cleared the Sulphur Powder which is correctly classifiable under sub-heading No. 2503 0090 which attracts nil rate of duty, the appellant was not entitled for cenvat credit on the inputs used in the manufacture of Sulphur Powder falling under sub-heading No. 2503 0090 of Central Excise Tariff Act-1985.

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