Case Law Details
Lyka Labs Limited Vs Commissioner of Central Excise & ST (CESTAT Ahmedabad)
In the legal case of Lyka Labs Ltd vs. Commissioner of Central Excise & ST (CESTAT Ahmedabad), the issue of a time-barred excise duty demand arose, despite the payment of such duty. Let’s delve into the details of this case, the arguments presented, and the final decision rendered by the authorities.
Background of the Case: Lyka Labs Ltd, engaged in the manufacturing of dutiable and exempted goods, faced a demand notice from the authorities for not following the prescribed procedure under Rule 6 of the Cenvat Credit Rules, 2004. Despite clearing excisable goods at a nil rate of duty, they were accused of not adhering to the requisite rules regarding the utilization of credit for manufacturing exempted goods.
Legal Arguments: The appellant argued that although the demand appeared time-barred, they had paid the proportionate credit attributed to the exempted goods. Citing legal precedents, they contended that penalties should not be imposed in such cases where the proportionate credit has been reversed.
Adjudication and Decision: After considering the submissions from both parties, the authorities acknowledged the strong prima facie case of time bar in favor of the appellant. Despite this, they recognized the payment made by the appellant towards the proportionate credit and decided not to contest it. Consequently, the demand for the proportionate credit was upheld, but no penalty was imposed. The appellant was instructed to pay interest until the date of reversal.
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