Case Details: Commissioner of CGST & Central Excise, Bolpur Versus Jai Balaji Industries (Unit-III)- (2025) 26 Centax 371 (Tri.-Cal)
Judiciary and Counsel Details
- S/Shri R. Muralidhar, Member (J) & Rajeev Tandon, Member (T)
- Shri S. Debnath, Authorized Representative, for the Appellant.
- Mrs Shreya Mundhra, Adv. & Shri S. Mohapatra, G.M. (Taxation), for the Respondent.
Facts of the Case
The appellant, a manufacturer of Ductile Iron Pipes (DI Pipes) under Chapters 72 and 73 of the Central Excise Tariff, was found to have availed Cenvat credit on common inputs used for both dutiable and exempted goods. Following an audit, the department issued a show-cause notice demanding 5%/6% of the value of the exempted goods, alleging improper claiming of Cenvat credit. The appellant had already reversed a proportionate amount of the Cenvat credit before the notice was issued, though not adhering to the procedural requirements under Rule 6(3) of the Cenvat Credit Rules, 2004. The case was brought before the Kolkata Tribunal for adjudication.
CESTAT Held
The Honourable Tribunal, after carefully examining the submissions and evidence presented, held that while the appellant did not strictly adhere to the procedural requirements under Rule 6(3) of the Cenvat Credit Rules, 2004, the reversal of Cenvat credit, which was done proportionately for the exempted goods, was substantively valid. The Tribunal acknowledged that the appellant had reversed the credit before the issuance of the show-cause notice and emphasized that the failure to follow procedural formalities should not hinder the benefit of proportionate reversal. Consequently, the Tribunal found that the department’s demand for 5%/6% of the value of the exempted goods was not legally sustainable, as the reversal was sufficient to meet the legal requirements.
List of Cases Cited
- Aster Pvt. Ltd. v. Commissioner — 2016 (43) S.T.R. 411 (Tribunal)— Noted [Para 7]
- Jai Balaji Industries Ltd. v. Commissioner — 2017 (352) E.L.T. 86 (Tribunal) — Noted [Paras 2, 4, 6]
- Mercedes Benz India Pvt. Ltd. v. Commissioner — 2015 (40) S.T.R. 381 (Tribunal) — Referred [Para 4]
- Pepsico Holdings by Madras High Court – Noted [Para 7]
