whether denial for credit is justified when the appellant has paid paid duty of Rs.66,58,896.00 against the demand of Rs.32,56,316/?

PJ/CASE LAW/2014-15/2464

Case:- SRF LTD Vs COMMISSIONER OF CENTRAL EXCISE

citation:- 2014-TIOL-2146-CESTAT-MAD

Brief facts:-The appellant filed this appeal against the impugned order to the extent of denial of cenvat credit of Rs.12,24,357/- in respect of five show cause notices issued during the period 16.4.1993 to 20.7.1994. the appellants were engaged in the manufacture of "Double side PVC coated Nylon Fabrics". From this fabric, the appellants also manufacture fabricated covers known as "Tarpaulin". The present appeal relates to denial of credit availed on Tarpaulin. Ld. Advocate on behalf of the appellant submits that the appellant cleared Tarpaulin under Chapter Heading 3926.90 on payment of duty. They have also availed cenvat credit. Subsequently, 'Tarpaulin' was classified under Heading 6301 and upheld by the Tribunal. Accordingly, five show cause notices were issued proposing to deny cenvat credit. It is seen from the show cause notice dt. 16.4.93 that it was proposed to deny or expunge modvat credit of Rs.85,034/- in terms of Rule 57I read with Section11A of the Central Excise Act and also as to why appropriate duty of 12% leviable under Chapter 6301 of the product 'Tarpaulin' should not be levied and demanded under Section 11A of the Central Excise Act.

Appealant’s contention:-The main contention of the learned advocate is that they have paid duty of Rs.66,58,896/- and the total demand would be only Rs.32,56,316/-. Thus it is clearly evident that they have paid excess duty. There is no material available that any demand was raised on double side coated fabrics captively consumed in the final product. In view of that, we find that they paid duty of Rs.66,58,896.00 against the demand of Rs.32,56,316/- and therefore denial of modvat credit of Rs.12,24,357/- is not justifiable.

Reasoning of judgment:-it is clearly evident that the assessee have paid excess duty. There is no material available that any demand was raised on double side coated fabrics captively consumed in the final product. In view of that, the tribunal found that assessee paid duty of Rs.66,58,896.00 against the demand of Rs.32,56,316/- and therefore denial of Modvat credit of Rs.12,24,357/- is not justifiable.

Decision:-appeal is allowed with consequential relief.

Comment:-since the assessee has paid excess duty therefore denial is not justified and Cenvat shall be allowed.

Submitted by:-somya jain

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PJ/CASE LAW/2014-15/2464

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